In 2000, the last full year of President Clinton’s administration, tax revenues were 20.6 percent of GDP, according to the CBO. That nearly equaled the all-time record of 20.9 percent achieved during World War II.
Yet last month, the CBO projected that total spending as a share of GDP would reach 33.9 percent by 2035. Therefore, even if we were to equal record tax revenue, we’d still be running a deficit of 13 percent of GDP by the time this year’s college graduates reach middle age. That’s the equivalent of $2 trillion in today’s dollars.
The numbers tell us that if we had one-party control of government by Republicans, they would be able to pass legislation to balance the budget exclusively by cutting spending. By contrast, if Democrats were in total control, they could not craft legislation to achieve balance exclusively through tax increases.
Thus, when analysts say that tax increases have to be part of the solution, they’re making an argument about the feasibility of the politics, not of the policy.