Most wealthy people know how to make money that doesn't count as earned income. Or they find ways to hide it, move it offshore, or in some other way avoid the extra tax. You just don't get the extra revenue you thought you were going to get, it is ALWAYS overestimated. And remember this, we tax earned income, not the wealth people already have. So they put their money in long term instruments where the return is not taxed until they realize the interest dividends. You know what happens when you raise taxes on a small business? They have to raise prices, cut expenses somewhere else, eat the loss, or go out of business. Liberals always think the 'eat the loss' option is the only one that will happen, but I don't think so. Sometimes business expansions or new startups are delayed because the ROI is reduced. People do lose jobs or their hours are cut back or new jobs are not created. There is an economic cost. There are rich people that sell out, pack up, and move out of the country. Raising taxes may increase that number, plus it deters rich people from other countries coming here instead of somewhere else with lower taxes. It isn't just the loss of income tax revenue, it's less money spent here and invested here. That means less capital and less economic growth. I think the issue of raising taxes on the rich is a poor idea that is an additional way to divide the country. On the revenue side, I think it would be better to examine all the tax deductions, loopholes, breaks, and subsidies first and get rid of the ones that are not cost effective. Which I'm sure is most of 'em. We can get more revenue just from that, before we begin to talk about raising the tax rates. Or you can look at a flat tax or consumption tax, but if there's one thing I'm sure of it's that we need to grow this economy and create more jobs if we are ever to become financially solvent. BTW, I didn't address spending, save it for another thread please.