Will increasing taxes on those that earn more that $250,000/year solve the U.S. Government’s spending addiction? Nope. There is no magic bullet for the debt crisis developing in the U.S. other than a rapid detox. As Peter Schiff likes to say “You don’t give an addict more drugs”. Washington has a spending problem and someone thinks that increasing taxes will somehow solve the income imbalance in the U.S.
Increasing taxes to protect Social Security and Medicare will be a short term solution, that is unless the U.S. Government finds a better place to spend the increase. Social Security has no funds other than ‘Special Issues’ which are non-marketable securities, in other words, I.O.Us. The only way Social Security can get funds for their I.O.Us is to sell them back to the Treasury, which the Treasury will need to borrow on the open market in order to buy the I.O.Us.
There is no Social Security surplus, the trust fund operates on a cash flow basis. It takes money in collected from FICA taxes and then pays out benefits. And Social Security has started adding to deficit, see the explaination here, and here.
Don’t plan on retiring, the Government has no intentions of taking care of you.