The Brookings Institution has two commentaries that draw on Jessica Riedl, Spending, Taxes, and Deficits: A Book of Charts, Brookings Inst. (April 2026). The first deals with taxes as a solution to long-term deficits, and the second addresses the short-lived balanced budget of the late Clinton years. Links and two charts, below the fold.
Jessica Riedl, Can Taxes Alone Fix Long-Term Deficits?, Brookings Inst. (May 5, 2026) (drawing on Jessica Riedl,
Myth: Long-term deficits have easy solutions, like new taxes on high earners and corporations that can close the fiscal gap without significant economic drawbacks.
Reality: While such taxes can be part of the solution, middle-class taxes and spending savings must also contribute to a plausible debt stabilization plan.
Riedl gives a chart of revenue produced from various tax proposals, with a threshold of 5% of GDP necessary to stabilize the United States’ debt over time.
Projected Revenue from Various Tax Proposals
| Tax Proposal (Static Scoring) | 10-Year Revenue ($ billions) | Long-Term Revenue (% GDP) |
|---|---|---|
| Raise Payroll Tax by 10 Percentage Points, No Wage Limit | 14,450 | 3.74% |
| Raise Income Tax Rates Across-the-Board by 10 Percentage Points | 13,366 | 3.47% |
| Impose a 20% Value-Added Tax (VAT) | 9,833 | 2.8% |
| 50% Income Tax Rate over $200k (Single) / $400k (Joint) | 6,112 | 1.57% |
| Repeal All Itemized Tax Deductions | 3,860 | 1.08% |
| Eliminate FICA Cap on All Wages | 3,460 | 0.89% |
| Impose Bernie Sanders’ 8% Wealth Tax | 2,966 | 0.59% |
| Raise Corporate Tax Rate from 21% to 35% | 2,142 | 0.53% |
| Repeal OBBBA for Families Earning over $400,000 | 2,098 | 0.53% |
| Limit Employer-Paid Health Tax Exclusion to 50th Percentile Premium | 1,088 | 0.43% |
| Biden Tax Hikes for Multinational Companies | 1,336 | 0.34% |
| Carbon Tax of $25/Metric Ton, Without Rebates | 1,037 | 0.29% |
| Reduce SALT Cap from $40,000 to $10,000 | 1,004 | 0.27% |
| Impose Bernie Sanders’ 77% Estate Tax | 616 | 0.17% |
| Tax Capital Gains as Ordinary Income and End Stepped-Up Basis | 645 | 0.16% |
| Impose a 0.1% Tax on Financial Transactions | 335 | 0.11% |
Jessica Riedl, How Did the Budget Get Balanced in the Late 1990s?, Brookings Inst. (May 11, 2026):
The surprising reality: The elimination of the deficit was largely a temporary historical accident, driven by forces mostly beyond the control of the politicians who claimed credit for it.
Contributing Factors to the Balanced Budget of the Late 1990s
| Factor | Change in Revenue (+) or Spending (-) (% GDP) |
|---|---|
| 1993 Clinton Tax Increase | +0.7% |
| Economic Growth and Other Small Tax Changes | +2.2% |
| Defense Cuts After Cold War Ends | -1.7% |
| Interest Savings | -0.9% |
| Reduced Unemployment Costs | -0.4% |
| Economic Growth Faster than Social Security Benefits | -0.4% |
| Various Small Savings | -0.5% |
| Total | -1.0% |
