Paying for healthcare will reduce tax receipts - taxes will go up even more.

Martin Feldstein - Obama's Health-Care Reform Plan Is Not the Answer - washingtonpost.com.

Although the president claims he can finance the enormous increase in costs by raising taxes only on high-income individuals, tax experts know that this won't work. Experience shows that raising the top income-tax rate from 35 percent today to more than 45 percent -- the effect of adding the proposed health surcharge to the increase resulting from letting the Bush tax cuts expire for high-income taxpayers -- would change the behavior of high-income individuals in ways that would shrink their taxable incomes and therefore produce less revenue. (my emphasis). The result would be larger deficits and higher taxes on the middle class. (again my emphasis) Because of the unprecedented deficits forecast for the next decade, this is definitely not a time to start a major new spending program.

Tax rates are not the same thing as tax dollars collected. Feldstein shows how the incentive effects of top rate tax increases erode the tax base - that is the level of dollars available to apply the higher rates to.  Not only will new entitlement spending explode the deficit directly, but trying to paying for it with higher tax rates will surely reduce the amount of dollars collected by the government. 

Berk

Comments

[Daniel M. Ryan]

Given the above, this item says volumes:

"2 Obama administration officials can't guarantee middle-class Americans won't see tax hike"

http://finance.yahoo.com/news/2-Obama-officials-No-apf-2491158742.html?x=0&.v=7