Here Tom Bethell at the American Spectator explains it another way:
Here’s my one-paragraph sermon on budget basics. Taxrates are prices. Taxes are quantities. Yet they are frequently conflated, as in the phrases “tax cut” and “tax increase.” When tax rates are increased, what happens to revenues? The Congressional Budget Office assumes that they go up by the same proportion. But they don’t. Imagine you are running a money-losing department store, and everyone gives you the same advice: “Raise prices on your luxury goods!” So you do, and the rich shoppers go somewhere else. Now you are worse off. Prices higher, revenues lower. You have learned a lesson. When it comes to prices (or taxes), the rich can move, or move their money, or both.Makes sense, right? He goes on:
Unfortunately, confused readers generally work to the advantage of liberals, whose permanent goal is to expand the power of government. As a rule, reporters draw attention to national budget problems only to persuade us that “more taxes” are needed. They mean more revenues, and they assume higher tax rates will produce them.
Spending cuts are equally misreported. Assume that $100 is being spent on some government program (think of it as $100 billion if you want to be more realistic). Now a “5 percent budget cut” is promised—but it’s not what you might imagine. Capitol Hill has 10-year budget projections already built in. So Congress has scheduled, let’s say, $110 (billion) for the same programnext year (a 10 percent increase). Under a 5 percent cut, only $105 will be allocated to the program instead of the projected $110.
So in the end, spending has gone up from $100 to $105 and that’s a 5 percent cut. So it goes. Reporters who write these stories never tell you that a budget “cut” is almost always an increase that has been slightly reduced from an earlier “baseline.” In the end, only the budget wonks understand what’s going on.
The best part: Paul Ryan is a budget wonk! I suspect Mitt Romney is as well, since he's a businessman. You can read more of the article yourself. Don't forget: Come January 1, 2013, we all see unprecedented tax increases coming from a confluence of expirations of cuts and new taxes: Taxmaggedon. Obama isn't talking about it because naturally, he'd rather have votes than inform voters.