Let's keep it simple. Government income tax revenue equals the tax rate times income. Thus, in theory, there are two ways to increase tax revenues:
1. Increase the tax rate, though this ALWAYS increases tax revenues less than expected because people change their behavior as tax rates increase. For example, they look to shelter more of their income, defer income into future years and/or work less. Government models are static -- they do NOT factor in any change in behavior due to higher tax rates, thus they ALWAYS over-estimate revenues from a tax hike. Just how hard do you think people would work if the tax rate was raised to 100%?
2. Increase the income base. Think "a rising tide lifts all boats".
Dems favor the first way of increasing tax revenues; Republicans the second.
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