You knew this was coming.
Nobel laureate Paul Krugman - might he finally be realizing that our budget deficits can't possibly be solved by just eliminating the Bush tax cuts? - is now calling for marginal rates even higher than when Bill Clinton was in office:
Why should 1990s taxes be considered the outer limit of revenue collection? Think about it: The long-run budget outlook has darkened, which means that some hard choices must be made. Why should those choices only involve spending cuts? Why not also push some taxes above their levels in the 1990s?
Let me suggest two areas in which it would make a lot of sense to raise taxes in earnest, not just return them to pre-Bush levels: taxes on very high incomes and taxes on financial transactions.
But has the "long-run budget outlook...darkened" because of tax receipts or spending?
NewsBusters readers know full-well the answer is the latter.
As I've noted many times in the past, if we had only grown our total expenditures at the rate of inflation since 2007, we would have had a $413 billion deficit in the just-ended fiscal year 2011. This would be even lower in the current year given projections of $2.9 trillion in unified tax receipts.
When you consider that total unified outlays in 2007 - before the Democrats took over Congress! - were $2.7 trillion, and that they rose to a staggering $3.8 trillion in just four years or 41 percent, it's just absurd to blame our fiscal woes on revenues.
But we've grown accustomed to this in the past couple of years, especially from arithmetically-challenged Nobel laureates like Krugman.
Yet readers shouldn't take this proposal by the New York Times economist lightly.
As serious spending cuts continue to be taken, well, unseriously by our lawmakers, and our debt continues to expand at levels threatening additional credit rating cuts, you should be prepared for more calls like this.
This may not happen in an election year when even a leftist like Barack Obama is aware of what happened to Walter Mondale in 1984.
But if the Republicans don't at least take back the Senate while retaining the House next November, 2013 could be the year America experiences the largest tax hikes in its history.
Tags: Bailouts, barack obama, Bill Clinton, budget, budget outlook, bush tax cuts, Earmarks, economy, fiscal woes, George W. Bush, medicare, national debt, New York Times, nobel laureate, nobel laureates, paul krugman, social security, Stimulus, taxes, unemployment