Rep. Jan Schakowsky wants to raise taxes to solve the deficit problem.
This is how a tax-and-spend liberal's mind works. Let's say a liberal is a small business owner (yes, I know it's a stretch, but play along). The business has $2 million in annual revenue, derived from sales of 200,000 widgets that each are priced at $10. But it also has $3 million in annual expenses, for a deficit of $1 million. How does the liberal plan to come up with the extra mil? By raising the price of each widget by $5, or 50 percent! On paper, that's 200,000 units at 5 bucks each, for an even mil. Problem solved.
Let's say people don't want to pay $15 for a widget that cost $10 last year, and 50 percent of them decide they don't need a widget or they buy them somewhere else.
Now her sales are 100,000 widgets at $15, or $1.5 million. She's lost half-a-million dollars in revenue.
When businesses need to make money, they lower prices to encourage economic activity. Have you ever heard of a coupon, Rep. Schakowsky?
All the time businesses are cutting prices in the hopes it will result in more sales. Governments are no different--by cutting taxes, you can increase the revenue to the government, and cut deficits.
Or, like the widget company, you can repeat the same mistakes Democrats (and sometimes Republicans) make by raising "prices" and watching economic activity plummet.
And no, Schakowsky doesn't want to just increase widgets by 50 percent. She wants to raise cap gains taxes from 15 percent to 28 percent. That's almost a 100 percent hike!
The name of this economic principle is the Laffer Curve. It states that if you raise taxes past a certain point, you will get less revenue. If you lower taxes past that point, you will get more revenue.
Liberals don't believe in this principle. But try this exercise.