A Tax-Side Agenda for Addressing US Budget Deficits

Om 2026, the federal government is on track to spend $7.4 trillion, and $1.9 trillion–about one-quarter of the total–will be newly borrowed money. It’s one thing to have deficit spending during a pandemic or a recession, but neither situation applies here. The accumulated federal debt owed to the public is now equal to 100% of US GDP, approximately matching the previous high set during spending and borrowing to finance World War II, and headed higher. Serious politicians would put some proposals on the table for debate for spending cuts and tax increases to reduce the gap. Kimberly Clausing and Natasha Sarin seek to launch a discussion for the tax proposal side of the debate in “$15 Trillion on the Table in 2029: Ordinary Taxes to Meet an Extraordinary Fiscal Moment.” The essay will appear in a book forthcoming later this year, In The American Economy in a New Era, edited by Melissa S. Kearney and Luke Pardue, and published by the Aspen Institute. Rather than grapping with the…