Revenue

In remarks at a diner in Arlington, Virginia, Vice President Joe Biden said that the "upside" of going down the so-called fiscal cliff "is even bigger than the downside." Biden attributed these thoughts to "business leaders."

Via the pool reporter present at today's event:

The Washington Post’s Glenn Kessler offers a highly misleading account of the 2001 and 2003 tax cuts, saying they were “passed for the wrong reasons” and implying that, since there was no real need to cut taxes then, there’s no real problem with raising them now.  (Kessler makes his claim in the context of admitting that an analogy used by Paul Ryan is “technically accurate,” although Kessler opines that he finds the analogy “misleading.”)

On Meet the Press, Rep. Chris Van Hollen, the ranking Democrat on the House Budget Committee, said that “political courage on the Republican side means taking on the revenue piece” of the deficit equation.  In other words, it requires Republicans to support raising taxes.  Time’s Mike Murphy and NBC’s Andrea Mitchell agreed. But these assertions belie the facts.

Last year’s unsurprisingly dismal budget numbers contain a surprising revenue story.  While overall federal revenue fell precipitously, payroll tax revenue barely dipped at all.  This divergent tale of two taxes has one conclusion but many implications.  America’s tax system, decidedly tilted toward upper income earners, is precariously balanced.  It is not only volatile in economic downturns – it is unsustainable long term.