Quick Rebalance

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Quick Rebalance — FY2027 Current law
Federal budget, % of GDP
Income gapThe Income gap is the ratio of the average income per adult of the richest 10% of Americans to the average income per adult of the bottom half (bottom 50%). It counts income after all taxes and government benefits — including cash benefits, tax credits, and health coverage such as Medicare and Medicaid. A value of 9× means the top 10% get nine times as much income per person as the bottom half. A smaller number means less inequality. (Measured per adult; source: World Inequality Database.): top 10% ÷ bottom 50%
Median householdThe median household is the one in the middle: half of US households have more income, half less. Its income is about $87,500 a year (Census, 2025), including Social Security for those who get it. Its federal taxes are roughly 14% of that, about $12,500: income tax (after credits), the employee share of payroll tax, and its small share of corporate, excise and customs taxes. With your changes, its income tax moves with the personal income tax slider and the family tax credits, its corporate share with the corporate rate, and its income with Social Security benefits. Taxes aimed at the top — the millionaire surtax, payroll tax on high wages, capital gains and estate taxes — barely touch it. Rough and illustrative.: income and federal taxes

Choose the changes you would make to taxes and spending for next fiscal year, FY2027 (October 2026 – September 2027). Every slider starts at the current level. The bars above start at current law — the Congressional Budget Office's projections for FY2027, as a share of GDP. Click Calculate Results to see where your FY2027 changes would leave spending, revenue, the deficit, the Income gapThe Income gap is the ratio of the average income per adult of the richest 10% of Americans to the average income per adult of the bottom half (bottom 50%). It counts income after all taxes and government benefits — including cash benefits, tax credits, and health coverage such as Medicare and Medicaid. A value of 9× means the top 10% get nine times as much income per person as the bottom half. A smaller number means less inequality. (Measured per adult; source: World Inequality Database.) between rich and poor, and the median household's income and taxes.

Tax Changes for FY2027
Income & Capital Taxes
Personal earned income tax iTaxes on wages and salaries — the largest source of federal revenue at ~8.8% of GDP. A +10% change means rates across all brackets rise by 10% of their current value.
0%
Capital gains tax rate (av) iTax on profits from selling assets like stocks or real estate held over a year. Current average effective rate is ~15%, raising about 0.7% of GDP. Because people can delay selling, higher rates raise less than proportionally: revenue peaks near 30% (near 40% if step-up is ended, since holding until death no longer avoids the tax). At 0% it is abolished; at 37% it matches the top earned income rate.
15%
Corporate income tax (av. rate) iAverage effective tax rate on corporate profits — currently about 15% after deductions and credits, raising ~1.3% of GDP. Statutory rate is 21% but effective rates are lower.
15%
Taxes on High Earners
Surtax on income over $1 million iAn extra tax rate on income above $1 million ($2 million for married couples), on top of today's rates. Fewer than 1 in 200 tax returns have incomes that high. A 10% surtax would raise about 0.43% of GDP a year (about $1.5 trillion over ten years, Yale Budget Lab, 2025), allowing for people shifting income to avoid it.
0%
iToday the 12.4% Social Security payroll tax (split between worker and employer) applies only to wages up to $184,500 a year (2026). Applying it to all wages, without raising benefits, would raise roughly 0.45% of GDP a year (based on CBO, 2024), nearly all from the top 10% of earners.
Estate Tax
Percent taxed above exemption iThe rate applied to estate value above the tax-free exemption, after deductions for bequests to a spouse or charity. Currently 40%, raising about 0.09% of GDP.
40%
Tax-free exemption — single filer iEstates below this threshold pay no federal estate tax — and, if step-up is ended, no capital gains tax at death either. Current law is $15M (from 2026). Because wealth is concentrated, lowering the exemption raises revenue faster and faster: about double today's at $5M, about four times at $1M.
$15M
iToday heirs inherit assets at their value at death, so gains built up during the owner's life are never taxed. Ending this taxes those gains at death at your capital gains rate, on the part of an estate above the tax-free exemption (not on assets left to a spouse — taxed when the spouse dies — or to charity). The gains tax is deducted before the estate tax is figured. It also makes people less inclined to delay selling, so higher capital gains rates raise more.
Spending Changes for FY2027
Discretionary Spending
Defense spending iCovers the military, Pentagon, and national security — about 2.7% of GDP. The US spends more on defense than the next 10 countries combined.
0%
Foreign aid iEconomic, humanitarian, health and security aid to other countries. About $47 billion in FY2025 (Pew Research Center) — roughly 0.7% of federal spending, or about 0.14% of GDP, far less than most people guess. −100% eliminates it; +100% doubles it.
0%
Other discretionary (non-defense) spending iNon-defense programs set annually by Congress: education, infrastructure, research, federal agencies. Excludes defense and foreign aid, which have their own sliders above. About 2.8% of GDP.
0%
Benefit Programs
Social Security benefits iMonthly payments to retirees, disabled workers, and survivors — the largest federal program at ~5.3% of GDP. Benefits are formula-based and politically difficult to reduce.
0%
Medicare / Medicaid health spending iMedicare covers seniors 65+; Medicaid covers low-income Americans. Together ~5.9% of GDP (including CHIP and marketplace subsidies) and growing fast as the population ages.
0%
SNAP (Food Stamps) iSupplemental Nutrition Assistance Program — provides food purchasing assistance to ~42 million low-income Americans. About 0.4% of GDP.
0%
Tax credits for working families (EITC & Child Tax Credit) iThe Earned Income Tax Credit and the Child Tax Credit cost about $190 billion a year together, roughly 0.55% of GDP (JCT, 2024). Most goes to low- and middle-income working families with children. Part is paid out as refunds and part reduces taxes owed; both count here as spending. −100% eliminates them; +100% doubles them.
0%
Your Quick Rebalance Results — FY2027
Federal budget, % of GDP
Income gapThe Income gap is the ratio of the average income per adult of the richest 10% of Americans to the average income per adult of the bottom half (bottom 50%). It counts income after all taxes and government benefits — including cash benefits, tax credits, and health coverage such as Medicare and Medicaid. A value of 9× means the top 10% get nine times as much income per person as the bottom half. A smaller number means less inequality. (Measured per adult; source: World Inequality Database.): top 10% ÷ bottom 50%
Median householdThe median household is the one in the middle: half of US households have more income, half less. Its income is about $87,500 a year (Census, 2025), including Social Security for those who get it. Its federal taxes are roughly 14% of that, about $12,500: income tax (after credits), the employee share of payroll tax, and its small share of corporate, excise and customs taxes. With your changes, its income tax moves with the personal income tax slider and the family tax credits, its corporate share with the corporate rate, and its income with Social Security benefits. Taxes aimed at the top — the millionaire surtax, payroll tax on high wages, capital gains and estate taxes — barely touch it. Rough and illustrative.: income and federal taxes
Methodology note: All changes are proposals for fiscal year 2027; starting levels are CBO projections for FY2027 under current law (CBO, 2026); foreign aid is assumed to stay near its FY2025 level (Pew, 2026). Most deficit impact estimates use a simplified linear model — each change is assumed proportional to its baseline share of GDP — and ignore behavioral responses and effects on economic growth. Estate tax, ending step-up, and capital gains use a fuller model: the estate tax base follows the concentrated distribution of estate sizes (calibrated to IRS, 2024 and CBO, 2021); unrealized gains rise from 13% to 55% of an estate with its size (Avery et al., 2013); ending step-up taxes those gains at death above the same exemption, at your capital gains rate, and that tax is deducted before estate tax; capital gains realized during life respond to the rate, as people delay selling (CBO, 2023), less so if step-up is ended. Income gap effects are illustrative. The Income gap starts from WID's 2023 figure of 9.1× (WID, 2026). Each change is split between the top 10% and the bottom 50% using rough shares of who pays each tax or gets each benefit (for example, the top 10% pay about 70% of personal income tax, while the bottom 50% get about 95% of SNAP), drawing on CBO, 2026. Defense, foreign aid and other discretionary spending are treated as having no effect on the gap, since WID spreads such public spending in proportion to income. Surtax revenue follows Yale Budget Lab, 2025; the payroll tax cap follows CBO, 2024; family tax credits follow JCT, 2024. These remain rough approximations. Real-world estimates would require dynamic scoring by the CBO or JCT. This tool is for educational purposes only.