The Office of Management and Budget estimates the government’s fiscal 2020 total revenue will be $3.643 Trillion, of which $1.822 Trillion will be from individual income tax and $256 Billion from corporate income tax (which, of course, just gets passed back to us consumers). That’s hardly enough to pay off $23 Trillion in debt anytime soon, especially given that that revenue must pay for all our other budgeted expenses, including the entire federal bureaucracy, transportation, defense, etc. Another $1.295 Trillion comes from Social Security, Medicare and Unemployment taxes, but all of that is supposed to “fund” those “underfunded” entitlement program liabilities.  

So, where is all this future needed tax revenue expected to come from? If you guessed “us” individual income taxpayers, you’re right. It’s the only place it can come from. The top marginal income tax rate today is only 37%. But in 1944 it was 94%. Thus, not only is there plenty of precedent to raise rates, there’s also plenty of room to do so.  

However, given, at least, the current political unpopularity of such a move, it appears it will be our children and grandchildren who will bear the brunt of that cost. How high will their tax rates go? Will there be any income left for them to save, to afford a house or college costs, or to fund their own retirement? It’s scary!