To resolve our current budget problems, some amongst the democrat elite have desperately exposed tax rates as high as 70%.
The main problem with the tired old song of simply "raising taxes" is that our debt is quickly exceeding our revenues. To review, U.S. GDP currently stands a approximately $14.4 trillion, with the U.S. Government receiving ~$2.2 trillion of this via taxes. At 14.7% of GDP, these revenues are the second lowest as of 1950. Spending however, is expected at ~$3.7 trillion for FY2011, resulting in a deficit of $1.71 trillion that must be borrowed to pay for other services. With such exploding deficits as of late, our total National Debt quickly grows beyond 70% of GDP.
Simply "raising taxes" out of this fiscal hole remains the primary mantra of Democrats. However, even with a 100% tax rate effective immediately, current spending levels would continue to push us towards crisis. The following video illustrates:
It is clear that prior to any talks of raising taxes rates (supposedly in order to raise revenues), spending cuts are required. Now the subject of intense negotiation amongst leaders within the Democrat and Republican parties, the primary political caveat however, is that outside potential reductions in military spending, the details of such cuts are to be quite painful for all sides. Particularly in regards to entitlement spending.
To better one's understanding of why our crisis shall require hard decisions, try your own hand at returning the United States back to solvency here, via a simulator brought to us by the Committee for a Responsible Budget.