"As the President’s economic advisors surely know, economic evidence points to fiscal consolidations being overwhelmingly about spending restraint, rather than revenue increases. But the battle at the cliff is political rather than economic and can best be analysed as such. (...)
First, the principal decision is about the size and scope of government. (...) Second, a larger government will require higher taxes — on everyone. After a New Year’s Eve policy hangover, we will realize that a larger government cannot be paid for simply by ‘taxing the rich.’ If in 2013 the public accepts a vision of a large government, a tax system that can raise much more revenue from many more people will be needed. (...)
Given his vision of more generous social insurance and a larger government, the President needs to articulate a path of tax increases for all Americans – higher income taxes or a new consumption tax. While they have articulated the case for tax reform, Republican leaders must define more clearly the size and scope of government they seek."
Source : http://blogs.ft.com/the-a-list/?p=41582&preview=true#axzz2EfSql9JR