Congressional Democrats and Obama Administration officials have trotted out the argument that failure to raise taxes on households earning more than $250,000 a year would explode the deficit.
The Washington Post reported today a breathless analysisby the Joint Committee on Taxation concluding that the Obama Administration's proposed tax increase would result in $36 billion of fiscal 'savings' next year over Republican proposals.
And Treasury Secretary Tim Geithner, in recent remarks to the liberal think tank, Center for American Progress, provocatively, and repeatedly, asserted that failure to hike the top tax rate "would be a $700 billion fiscal mistake" citing JCT's estimate of the fiscal price tag over a ten-year budget horizon.
Reporters latched on to Geithner's salacious $700 billion morsel and raced off to file stories highlighting the Democrats latest argument in the coming tax battle.
Anyone reading these stories would be excused for believing that federal deficits will be $700 smaller with the tax hike in place. But they would be wrong.