When the U.S. Senate, on a procedural vote, killed the so-called "Buffett Rule" last month, even some liberal lawmakers and pundits said it was more about politics than economics. The rule would have imposed a 30 percent tax on all income for people making more than $2 million a year, and would have generated about $5 billion a year in additional tax revenue, or about 0.2 percent of total tax revenue.
The bottom line: A tax increase, even a dramatic one, will not solve the debt problem, and a tax increase brings with it the probability of sending much needed capital to other countries. The following chart looks at the federal budget and then eliminates eight zeros, bringing the problem into sharper focus.
The U.S. federal budget in numbers we can all understand:
U.S. annual tax revenue: $2,340,000,000,000
Federal annual spending budget: $3,590,000,000,000
New annual debt from overspending this year: $1,250,000,000,000
National debt: $15,400,000,000,000
Last year's budget cut by Congress: $38,500,000,000
Now remove 8 zeros and pretend it's a household budget:
Annual family income: $23,400
Money the family spends annually: $35,900
New debt added to credit cards: $12,500
Outstanding balance on credit cards: $154,000
Total cuts to the family budget: $385