The US government needs to cut through the baloney and apply the Willie Sutton Law to its budget. Here is a bit from a post on a blog at the Center on Budget and Policy Priorities:
IRS data show that the top 1 percent of taxpayers had a combined income of $1.7 trillion in 2008, the most recent year available. This is fully 20 percent of the nation’s total adjusted gross income — and much more than the bottom half of the population had (around 13 percent).Taxes on the ultra-rich need to be raised back to levels where the government last had balanced books.
Moreover, the tax burden at the top of the income scale has fallen dramatically in recent decades. IRS data show that the top 1 percent of taxpayers paid an average of about 23 percent of their income in federal income taxes in 2008. That’s far below what they paid prior to the Bush tax cuts, and about a third less than they paid back in 1980.
Returning the average tax rate on the top 1 percent of taxpayers to its 1996 level of 29 percent could raise about $100 billion a year, or $1 trillion over the next decade.
But the push to "balance the budget" has to avoid the mistake that FDR made in 1937:
By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was considerably lower than the 25% rate seen in 1933. In June 1937, some of Roosevelt's advisors urged spending cuts to balance the budget. WPA rolls were drastically cut and PWA projects were slowed to a standstill. The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 per cent and production of durable goods fell even faster.Tax the rich but don't use it right away to balance the budget. Use it to create WPA-style public works projects to employ the 25 million Americans who are unemployed, under-employed, or too discouraged to even look for work.
Unemployment jumped from 14.3% in 1937 to 19.0% in 1938, rising from 5 million to more than 12 million in early 1938. Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels. Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. In most sectors, hourly earnings continued to rise throughout the recession, which partly compensated for the reduction in the number of hours worked. As unemployment rose, consumers' expenditures declined, leading to further cutbacks in production.