To fix the nation's problems, President Barack Obama has said the richest Americans need to pay more in taxes, according to the Wall Street Journal.
The top 5 percent of income earners currently pay 59 percent of all federal income taxes in the U.S., and 42 percent of tax filers either pay no money to the federal government or get a check from the government because of the earned-income tax credit, according to the article. Obama has implied that only 2 percent of Americans need to pay more taxes, and that if people earning over $1 million a year paid a minimum of 30 percent in federal income taxes, the nation's debt problem would be solved.
But Obama's plan would only generate $1.1 billion in revenue for the next fiscal year. That's not enough because the federal government is spending $1.2 trillion more than it brings in, according to Congress's Joint Committee on Taxation.
Republican presidential hopefuls have proposed making the Bush tax cuts permanent while shrinking the deficit at the same time. Both Obama's and the Republicans' plans wouldn't shrink the deficit enough to actually fix the problem, according to the article. In the 1990's, Congress and President Bill Clinton came up with a long-term debt-reduction plan that put more certainty into the business market. A debt-reduction plan that actually cuts spending and increases revenues would be the best way to stimulate the economy.
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