If we pick, somewhat optimistically, the mean tax take of the Clinton years, that means that we need a tax hike of 5-6% of GDP. And not over 20-30 years. The CBO’s baseline projection of the budget deficit, which assumes that the Bush tax cuts expire (and that the AMT is allowed to hit middle class incomes, and that the “doc fix” doesn’t happen), is for budget deficits in the range of $750 billion. If you allow the Bush tax cuts to expire, but assume that we are not going to slash Medicare reimbursements for doctors by 30%, or let the AMT hit people making $75,000 a year, then it’s more like $900 billion. If you assume that discretionary spending grows roughly in line with nominal GDP, it will be $1.2 trillion. Maybe that’s only 5% of GDP by 2021. But it’s still not a healthy and sustainable level of borrowing; we’re going to have to raise taxes pretty quickly.

A tax hike of 5-6% of GDP doesn’t sound like much. But that’s a big tax hike if your baseline is 19%–it means that everyone’s taxes go up by about a third. If the equilibrium tax revenue at Clinton rates is more like 18-18.5% of GDP, then obviously, they have to go up even higher, from a lower baseline. If you try to concentrate the pain on the wealthy or corporations, it’s an even bigger whack. Meanwhile, state and local taxes will be going up too; they have many of the same pension and entitlement problems that the federal government does.