The next president will have to address fiscal imbalances within the government and a dramatically rising federal debt.National debt has been on a more or less steady rise since 1974 when, after a steady decline from the massive debt accumulated during WWII, it hit a low of 33.6 percent of GDP.Total national debt was more than $10 trillion at the start of fiscal year 2009.

This rising debt is driven by entitlement growth, resulting from demographic changes and rapidly rising healthcare costs.An aging population, especially in light of the retirement of the Boomers, is projected to increase Social Security payments from 4.3 percent of GDP today to 6 percent in 2030. More significantly, Medicare and Medicaid are expected to grow from just over 4 percent today, to 18.5 percent of GDP by 2082.This level will exceed the average level of federal revenues over the past 50 years.Even under the most optimistic economic growth assumptions, revenues will not come close to keeping up with this spending growth.

Under reasonable assumptions, non-interest federal spending will climb to 35 percent of GDP by 2082, while revenue will reach 21 percent.This would leave a 14 percent of gap that would have to be made up for with additional borrowing.Interest on this debt is projected to reach 40 percent of GDP, resulting in the government being 75 percent of the economy.

This crisis may seem to be decades off, but the next president will need to make some choices about how to deal with them in the near term.The longer we wait, the worse these problems become and the more painful the reforms must be to maintain economic stability.At present, the 75-year fiscal gap, which measures the amount that the federal government either would have to cut spending or raise taxes immediately to stabilize the debt-to-GDP ratio over the next 75 years, is 6.9 percent of GDP under realistic assumptions.

The Congressional Budget Office has said that marginal tax rates would have to rise significantly to cover the entire shortfall using only individual and corporate income taxes.The 10 percent rate would have to rise to 25 percent, the 25 percent bracket to 63 percent, and the 35 percent bracket to 88 percent.Those numbers provide a clear indication both that these problems will need to be addressed in the near future, and that the solution will likely require a compromise that includes both spending and taxing changes.

Many analysts and policymakers believe that the tax system also suffers from structural problems that require fundamental reform.Some point to the complexity in the current system, which contains nearly $1 trillion in tax expenditures that often fail to achieve their stated goals.Others point to problems with the corporate income tax, which is among the highest statutory rates in the world.

Many economists believe the current tax code discourages saving and investment and advocate moving toward a consumption tax.Some argue that our tax system should be modified to better encourage or discourage certain types of consumption such as energy, healthcare, or education.Finally, many have distributional concerns over the current tax system, arguing that it either does too much or too little to redistribute income between groups.

But regardless of whether the concern is distribution, complexity, fairness, incentive structures, or economic viability, there is a growing consensus that the current tax system is in need of fixing.

Because of outstanding tax issues, specifically the expiration of the 2001/2003 tax cuts and continued expansion of the AMT, the next president and Congress will have no choice but to address tax policy.As they confront these specific issues, they should also focus on the broader question of how much we want our government to spend, and how we will raise the appropriate revenue to finance that spending.

To make an informed election decision, voters should be aware of the fiscal implications of each candidate’s tax proposals.In the following voter guide, US Budget Watch attempts to shed light on these often-complex policies.