Jon Chait observes that even the middle class tax cuts being touted by the Obama administration will leave revenue unsustainably low. I would further add that while the bulk of the money involved in the middle class cuts will end up going to middle class people (who are numerous), rich people will, qua individuals, be getting a bigger tax cut.
Meanwhile, Republicans joined by some Democrats want to also throw in a rich people only tax cut. Josh Barro points out that such a move “would bring in federal revenues of just 18% of GDP over the next decade” whereas even Paul Ryan’s draconian budget “roadmap” states that 19 percent of GDP is needed. On top of that, Benjy Sarlin reports that Ryan’s Roadmap isn’t draconian enough for some tea party types:
For some in the Tea Party movement, the standard they plan to judge the party’s progress by is sky high. A spokesman for Rand Paul, the Tea Party-backed Senate candidate in Kentucky, said Paul “will vote against and filibuster any unbalanced budget proposal in the Senate.” [...]
“I personally think a balanced budget is imperative and I think there’s tremendous support for a balanced budget,” said Mark Meckler, a spokesman for the Tea Party Patriots. Lawmakers who vote for anything less will “see a lot of frustration out there in the electorate if they do that.”
The Ryan Roadmap, by contrast, envisions the budget not being balanced until 2063 and that’s assuming tax revenues go up higher than where Mitch McConnell and Joe Lieberman are currently insisting they need to be.
Which is just to say that the politics of taxes in the United States have become completely insane. The scale of the derangement is currently being masked by a recession dynamic that’s holding interest rates very low. But at some point in the foreseeable future, we’re looking at a major trainwreck. The gap between where politicians are and where revenue needs to be is enormous.