Question

If the federal government were to try to borrow more in future years to expand its capability to boost discretionary spending, what would likely happen to its net interest costs?

Short answer

A one-time tax increase will never be enough to remove it. Rather than paying down debts, the government can opt to spend more.

Step-by-step solution

Introduction

A large percentage of Americans pay property taxes based on the property's fair market value. Taxes are levied on a wide range of assets by citizens of other countries.

For example, in country F, there is a solidarity tax on wealth above a specific amount of total net worth.

The marginal rate varies between$0.5$and $1.5$percent. People who have greater wealth pay more taxes than those who have not.

Step 2:  Explanation

However, the International Monetary Fund recently proposed that a one-time wealth tax be implemented.

This is true not only for wealthy individuals, but also for any household with a positive net worth.

In order to lower the existing enormous public debt, the IMF will take around ten percent of income from anybody who has something to tax (once).

This does not guarantee that a one-time wealth tax will eliminate the deficit fully. It will never be eliminated by a one-time tax hike. Instead of paying down debts, the government can choose to increase spending.