MINNEAPOLIS (WCCO) – As negotiations continue in Washington, D.C. to avoid falling off the so-called “fiscal cliff,” many are left with a simple question: can taxing the rich raise enough money to make a dent in the national debt?
The issue was a key part of President Barack Obama’s reelection campaign: returning taxes to where they were during the Clinton administration – for rich people.
But can raising taxes on the rich pay off the national debt?
The budget deficit for one year is about $1 trillion. The national debt is $16 trillion.
Jay Kiedrowski, senior fellow at the University of Minnesota’s Humphrey School for Public Affairs, gives us the short answer.
“The simple answer is no. There just isn’t enough dollars,” Kiedrowski said.
Kiedrowski has built budgets for Minneapolis and Minnesota, before becoming an Executive Vice President at Wells Fargo.
He said President Obama’s plan to let the Bush tax cuts expire for people making more than $250,000 a year would raise $56 billion.
“You’d have to do twenty times that in order to resolve the trillion dollar deficit,” he said.
Billionaire Warren Buffett wants to tax the top 0.3 percent; people making more than $1 million a year would pay a minimum of 30 percent. He recently floated around the idea of charging a minimum 35% tax on people making more than $10 million a year.
That might net another $20 billion a year, according to FactCheck.org.
But Kiedrowski says taxing the rich is only a small part of what fully needs to be done to fix the deficit.
“We need to cut spending, we need to raise additional taxes, and we need to get the economy growing again,” said Kiedrowski. “If the economy were to grow, that will shrink the deficit fairly rapidly.”