This is a long read but knowledge is gained . Read the last two sentences in paragraph 2 and read paragraph 3. This tells it all.
Should Republicans trade tax hikes for spending cuts? Much of the debate over the current fiscal cliff standoff centers around discussions of “ratios”: Republicans will agree to X dollars of tax hikes, Democrats will agree to Y dollars of spending cuts, and so forth.
Much of this discussion is based on numbers that are misleading or worse, because Washington doesn’t calculate taxes and spending the same way. A tax hike will raise real, immediate costs on real taxpayers, whether or not it actually raises any more revenue. The targets of a tax hike are citizens, who do not have a choice whether to obey. By contrast, a “spending cut” may simply involve altering future projections of the rate of increase of spending, and thus agreements to cut spending rarely actually result in less spending. And the targets of such spending cuts are future Congresses, who can disregard them at will; they’re not binding.(Read More)