"They will have no realistic proposal to reduce the debt or sustain the welfare state. Even if you tax away 50 percent of the income of those making between $1 million and $10 million, you only reduce the national debt by 1 percent, according to the Tax Foundation. If you confiscate all the income of those making more than $10 million, you reduce the debt by 2 percent. You would still be nibbling only meekly around the edges."
This is incoherent to begin with. Tax policy directly affects flows, not stocks, so its impact on the national debt (a stock) is indeterminate unless you specify a length of time for the policy to be in place.
If you look at the Tax Foundation report, it says that those two policies would increase taxes by $306 billion. The Tax Foundation doesn't even say in what year that would happen, but they link to a series that ends in 2009, so let's say they're using 2009 data. In 2009, GDP was $14.1 trillion, so $306 billion is 2.2 percent of GDP.
Now let's apply that to the CBO baseline. Right now, my updated CBO-style baseline shows national debt at 61 percent of GDP in 2021 and 59 percent in 2035. If you add 2.2 percent of GDP to revenues in every year beginning in 2012, those numbers fall to 44 percent in 2021 and 5 percent in 2035 (a reduction in the debt of 54 percentage points, or 92 percent). In other words, the entire long-term deficit problem goes away.
---SPSmith
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