Week in Insights: The Role of Taxes in the Debt Ceiling Debate

The debt ceiling dominated the news cycle this week, and one needn’t look far to find the tax angle—the Republicans want to limit federal spending of tax revenue and have appeared unwilling to approve any tax increases. For their part, the Democrats have floated tax loophole-closing initiatives to offset expenditures and save myriad so-called green tax credits.

Think of the government as a household and tax revenue as household income. The bills that are due represent debts. One party, the Republicans, has disputed those bills—threatening not to write the check unless we promise to spend less next time. They argue ...