Fixed vs. Revenue-Linked Government Bonds

This white paper examines the potential fiscal implications of adopting revenue-linked government bonds as an alternative to just traditional fixed-rate bonds. Using historical U.S. federal tax revenue data (2000-2024) and simulated future scenarios (2025-2044), the analysis quantifies differences in interest costs, volatility, and budgetary impact. Results indicate that revenue-linked bonds could have saved over $1 trillion in total interest over the 45-year span, but at the cost of significantly greater variability in annual payments.