Yes... I have slept better lately knowing that the rich are now paying closer to their "fair share" and that our deficit was reduced by... oh... about 4 or 5 percent in the process. Of course, the President isn't satisfied, stating that they still need to pay more. Okay, fine... let's double that increase on the rich, shall we? We can receive about $124 billion in new revenue and still not put a dent in the deficit... which including the tax hike on the rich (and the much larger tax hike on everyone else) is still well over a trillion dollars a year.
Here is the logical mathematical problem with all of this. The larger increase to taxes for the rich, only brings in at most 20% of what the much smaller across the board payroll tax increase does. Reality is that there isn't enough rich people to fund the government. Let me repeat that... there isn't enough rich people to fund the government. Or to put it another way... there isn't enough rich people to fund the government. Lastly, there isn't enough rich people to fund the government.
Did I mention that there simply isn't enough rich people to fund the government??
In fact... there really isn't enough taxpayers to fund the government. In 2011 (the last complete year of historical data compiled by the CBO) the deficit was $1.362 trillion and the total tax revenue from individuals was $1.091 trillion. What this means, is if you double income tax on everyone... you would still be running a deficit of almost $200 billion. Let me repeat that... if you double the income tax on everyone... you would still be running a deficit of almost $200 billion.
I know it's simple to not think about it too hard. It's easier for certain fiscal liberals to believe fairly knee jerk that everything can be fixed by increasing taxes on the rich and/or cutting military spending. I hear this assumption repeated quite often, as if repeating it often enough will make it so. Btw, defense makes up less than 20% of overall spending, even though it's one of the few pieces of our government that is laid out by the founding fathers as a function of the Federal Government. Cutting defense out of the budget completely still would leave us with a budget in the $700 billion range.
Realistically... double the recent tax increase on the rich and cut military spending in half... and it solves nothing. You would still have a budget deficit higher than any budget deficit under any President not named Obama.
Bottom line... do I have to really say it here folks?
We have a spending problem... and no amount of these around the edges revenue increases are going to even slow things down... proven by the fact that the current agreement "adds" fairly significantly to the long term deficits.