There is nothing wrong with raising taxes on the rich to a point. However, you can't get rid of a more than 1 trillion dollar deficit by taxing the rich alone. Certainly raising their taxes a few percentage points and cracking down on tax evaders is a very good thing and can contribute a lot to the government's revenue.
You know what, the rich mostly don't care if you raise their taxes. If I was making 250K a year, I wouldn't particularly care if the government took another 10k from it in taxes. Which is why many super-rich congressional districts actually elect Democrats.
There comes a point, though, where raising their taxes is detrimental to the economy. For example, with taxes at the current rate, a rich person could invest in a small business, which creates jobs. If his taxes are too high (I'm talking over 50% federal income tax), he doesn't invest that money, and instead saves as much as he can.
Now, I sincerely doubt that Obama or the Democrats would do that. The point is, if you want to deal with a budget deficit this large, then you must either have an across the board tax hike, or you can cut spending.
But you know what? I looked over the 2009 tax brackets, and I have to say that Republican's rhetoric is overblown. It doesn't even exceed 30% until you make 372K a year. At that point you probably have so many investments that it doesn't matter that much.
The thing I don't like about Democrats on this issue is that their answer to any questions about the deficit is to raise taxes on the wealthy. As I said above, you either have to raise taxes on everybody, or cut spending. Few Democrats will admit this, which is a shame.
33% of your income plus local taxes (state income, property tax, sales, etc.) is horrendous. In some states you can wind up paying well over 50% of your income in taxes. I don't think anybody should be forced to pay that much, especially not professionals or small business owners. Those people work extremely hard to get where they are generally speaking, and often at great cost (risk) to themselves - higher taxes could discourage that.
Raising taxes on the middle class and poor in addition to the rich through something like a national sales tax or VAT is even worse in my opinion. That would put an even higher tax burden on individuals already being hit hard not just by the economy but often by other local tax raises (e.g. property tax). If you think the protests now are bad just imagine what things will be like if they attempt that. The public would be
furious, and rightfully so.
What I think we need to do is to put the government on a diet, by reforming our entitlement systems and downsizing the various government bureaucracies we've established over the years. Even more importantly, we need to stop propping up all the 'too big to fails' out there. When we're running deficits in the trillions, our government is telling us the cost of the bail outs alone could be $23 trillion (nearly twice our current gdp!) and countries like china are buying less and less of our debt I think it's obvious where this will lead if we do not reverse course.
TL;DR: Stop taxing so much, stop spending so much, stop subsidizing proven failures, establish an economy based on savings and production instead of debt and mindless consumption.
