The claim that we are heading toward Taxmaggedon is built on the idea that recent tax cuts are set to expire at the end of 2012 and, that, therefore, if Congress doesn't do something after the election, taxpayers will be hit with a signficant tax increase all at once, harming taxpayers with modest incomes and possibly slowing economic recovery. We discussed the issue critically here and followed up here. But allowing taxes to go back to their previous levels would greatly reduce the deficit, while both parties' Taxmaggedon "solution" will bloat the deficit. The Republicans, for instance, want all the Bush II income tax cuts to stay in place. That would add $4 trillion to the deficit over the next decade according to the Congressional Budget Office. President Obama's plan -- which would keep the cuts in place for everyone except those earning over $250,000 per year -- would add a mere $3 trillion to the deficit over the same period. Read about it here.