Will taxing the rich offset the deficit?

Santelli talked about taxing $1M from each of the person that makes $1M or more. This would be 100% tax rate for anyone that makes $1M. However, the $1M is a very small number for someone that earns say $400M (of which there are very few). Thus the higher rate would certainly bring more than $1M in revenue for those earning much more than $1M.

There is a top-down, supply side argument that lower marginal tax rates leads to higher rates of investment and subsequent GDP growth. The Congressional Research Office recently released a report that analyzed every tax cut for which there was a subsequent measure of GDP growth and Investment growth. That report found no evidence of a relationship between tax cuts and subsequent GDP growth and investment. Some may argue that the report misses something because they hold fast to the "Field of Dreams" theory of economic growth - i.e. build it and they will come.

Taxing the rich will serve to right a errant legislative move made when Bush entered office. While it may not completely offset the deficit, it will offset part of it. Furthermore, if you believe that people maximize utility, the wealthy will adjust to account for the higher tax rate.

Over the long-term, as real growth takes hold and we move toward balanced budgets / surpluses, presuming a large part of our debt has been paid down, I think all would welcome lower tax rates. That future outcome depends on our willingness to share in sacrifice today, and to hold the government accountable for its actions between now and then.

Even if it accounts for ~50-60B per year, the question is what would get cut otherwise? I.e., I don;t think it is a question of absolutes but rather of tradeoffs. What is the alternative for getting those 50-60B in defficit reduction? I think it is fair to ask the rich to contribute a bit more.

It won't offset the issue in any way that is meaningful, even if we, as Santelli did, assume that collections remain the same with a 100% confiscation of value from "the rich."

Instead, if the government wants to get more money from its citizens, they would raise more money by collecting it from the inefficiencies created by the complicated tax system. Such a case would be with mortgage deductions; whereby people who can pay taxes are not paying them because they are legally entitled to a mortgage tax deduction. By reducing or eliminating this the government can collect much more money (ie: from the rich) than by continuing to disincentivize people to work.

There is no budget line that can be cut or tax levied that will completely fix close the deficit. It will need to be many items, and raising taxes on the wealthy is one part of the solution.

"The rich" will restructure arrangements, convert income to capital, move assets between jurisdictions and/or increase leisure time such that little if any extra revenue will be raised. Taxation revenue as a % of GDP has rarely been above 18% regardless of rates

This is leaving aside the moral issue of forcibly confiscating people's assets and the disgusting envy involved in labelling people "the rich", "1%-er" etc - envy encouraged and promulgated by the President, his administration and its surrogates of the MSM.

The Patriotic Millionaries, a group of high-earning individuals pushing for the removal of the Bush tax cuts, estimates that this would generate $500-$600B of additional revenue over 10 years. This plan would actually raise $40-$50B of additional revenue a year, less than 3% of the deficit.

http://blogs.wsj.com/wealth/2011/08/15/would-taxing-the-super-rich-raise-much-revenue/