Reducing the Deficit by Increasing Individual Income Tax Rates:

Amidst debates concerning the proposed “Buffett rule” and the impending expiration of the 2001/2003/2010 tax cuts, this has been a leading topic of discussion as policy makers consider ways to stabilize the deficit and debt. Focusing on three options – all assumed to be effective in 2015 – the paper examines whether increases in just the top two or three individual income tax rates alone could bring the debt to a sustainable level of a 60% debt-to-GDP ratio. … [T]his paper finds that an increase in the top income tax rates would need to be combined either with spending reductions or other revenue measures to meet a 60% debt-to-GDP ratio under some current policy baseline scenarios.