Results in a Carbon Tax AND spending cuts

(Rudolph, Phd in economics from the Johns Hopkins University, Institute fellow at the Urban Institute, frmr assistant director for economic policy at the Office of Management and Budget, “A U.S. FISCAL CRISIS?,” pg online @ https://www.urban.org/sites/default/files/publication/99224/a_u.s._fiscal_crisis.pdf //um-ef)

It will be impossible to dig ourselves out of our fiscal hole without some tax increases. Solving the entire budget problem on the spending side would require politically implausible restraints on the growth of benefits for the elderly. On the other side, solving the entire budget problem with tax increases is equally implausible. It would take frequent, substantial tax increases to keep up with the financial demands of the elderly programs. In 2018, 49 percent of total revenues are expected to come from the individual income tax and 34 percent from the payroll tax. The left often proposes increasing tax burdens on upper income groups by raising marginal rates toward the top of the personal income tax rate schedule and by raising the payroll tax base, now at $128,400. But there is a real question as to how much revenue this could raise without significantly increasing tax avoidance, evasion and reducing incentives to work and to save. It is my judgement that if we face a fiscal crisis we shall have to resort to a new broad-based tax such as a VAT or a carbon tax. In Ireland and in Greece the budget crisis was partially solved with the help of numerous increases in VAT tax rates and in Ireland with a new carbon tax.