President Obama did call for raising taxes as part of his long-range budget plan unveiled April 13. Mr. Obama, seeking to reduce the deficit by $4 trillion over 12 years, suggested his plan was a more balanced approach that relies on both spending cuts and an increase in taxes on the wealthy. Yet the tax increase will be one of the most contentious parts of his plan.
Editor's note: This story has been updated to reflect the settlement of the federal government's budget impasse on April 8.
The antitax ethos has been shaped by both politics and principle. To tax opponents, the overall tax burden is still needlessly high – the US corporate tax rate, for example, is one of the highest in the industrialized world – suppressing the activity of businesses and individuals who would otherwise use those resources to stimulate the economy and create more jobs. They say higher taxes would just feed an already bloated government that is getting inexorably bigger by the day. As the nation once again grapples with staggering deficits and some $14 trillion in debt, the real problem, they insist, isn't a lack of revenue. It's too much government spending.
To critics, however, the refusal to even consider raising taxes is threatening the nation's financial future. Democrats and many independent analysts argue that the debt problem is just too big to be tackled through spending cuts alone, and that any eventual solution must involve higher revenues.