As congressional negotiators continue to debate the contents of a deficit reduction package, discussions are reportedly tilting toward a deal that will include spending cuts but no revenue increases.
Over at the Campaign for America’s Future, the Institute for Policy Studies’ (IPS) Sam Pizzigati notes that one way to very easily tackle U.S. debt going forward would be to increase taxes on corporations and the wealthy to levels more closely matching mid-20th century rates. Pizzigati cites an IPS paper from last spring to make the argument that if corporations and households making more than $1 million paid the same rates as they did in 1961, our debt would virtually disappear in a decade:
Some numbers — from an Institute for Policy Studies report released this past spring — can help us better visualize just how monumental this political failure has been. If corporations and households taking in $1 million or more in income each year were now paying taxes at the same annual rates as they did back in 1961, the IPS researchers found, the federal treasury would be collecting an additional $716 billion a year. In other words, if the federal government started taxing the wealthy and their corporations at the same rates in effect a half-century ago, the federal debt to investors would almost totally vanish over the next decade.
As ThinkProgress has previously reported, the richest Americans are paying their lowest taxes in a generation. Additionally, Center for American Progress experts Michael Linden, Seth Hanlon, and Jordan Eizenga have shown that the United States is actually very low-tax compared to other developed countries.