No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

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Why tax hikes need to be way off the table

by @ 16:23 on July 31, 2011. Filed under Budget Chop, Politics - National, Taxes.

Presented from the Congressional Budget Office June 2011 Long-Term Outlook, the anticipated federal tax burden in terms of GDP between 2013 (the first year the “SuperCommission”‘s $1.5 trillion in deficit reduction will likely affect) and 2021:

Extended-baseline (Bush tax rates expire at the end of 2012, alternate minimum tax not “patched” to protect middle- and lower-income taxpayers, and also the base from which that $1.5 trillion will be scored):
2013 – 18.8% (already well above the 1951-2000 18.06% average)
2014 – 19.9%
2015 – 20.0%
2016 – 20.0%
2017 – 20.3%
2018 – 20.4%
2019 – 20.5%
2020 – 20.6%
2021 – 20.8% (a new non-WWII record, breaking the 20.6% GDP set in 2000)

Alternate Fiscal Scenario (assumes Bush tax rates continue, AMT “patched” annually):
2013 – 17.0%
2014 – 17.5%
2015 – 17.6%
2016 – 17.6%
2017 – 18.0%
2018 – 18.1% (again, above the 18.06% 50-year average)
2019 – 18.2%
2020 – 18.3%
2021 – 18.4%

Moreover, while the CBO assumes in the Alternate Fiscal Scenario further tax-rate cuts are made to keep revenues at 18.4% GDP, The Heritage Foundation does not. They estimate that keeping the Bush tax rates and implementing an AMT fix would put the tax burden above 18% GDP by 2013, and above 20.6% GDP between 2030 and 2035.

To paraphrase the campaign of the last Democrat President, “It’s the spending, stupid!”

Revisions/extensions (6:28 pm 7/31/2011) - Jimmie Bise reminded me that, in 1944, the federal government took in 20.9% of GDP.

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