I was surprised to learn that federal government revenue, as a percent of GDP, has hovered between 15-20% for the last 60 years, no matter what the actual marginal rates, deductions, loopholes, etc. are.
http://www.deptofnumbers.com/blog/20...action-of-gdp/
Realistically, can that be increased? Is that a sweet-spot on the Laffer Curve? Is that just what we're comfortable with in America? Because if revenue is realistically going to stay around 20% of GDP no matter what tax rates we set, then federal government spending should also be around that level (or a bit below) in normal times. Currently, it's 23% of GDP, so there's not really a big spending problem at the moment.
I debated putting this in the Econ sub-forum, but there are a lot of political implications of a static revenue rate.
My own take is that we should be spending a few points more on jobs programs ($100-$200 billion a year) My worry is that we never follow through on reducing spending during good times, so the debt-as-percentage-of-GDP creeps up and up. This limits our ability to respond to crises, like the 2008 recession.
However, the budget deficit, while large, is a fraction of what it was a couple years ago. We seem to have stabilized, and are slowly growing and putting people back to work. Maybe 2% GDP growth is the best we'll do for the next couple years. I guess we could do a lot worse.
http://www.deptofnumbers.com/blog/20...action-of-gdp/
Realistically, can that be increased? Is that a sweet-spot on the Laffer Curve? Is that just what we're comfortable with in America? Because if revenue is realistically going to stay around 20% of GDP no matter what tax rates we set, then federal government spending should also be around that level (or a bit below) in normal times. Currently, it's 23% of GDP, so there's not really a big spending problem at the moment.
I debated putting this in the Econ sub-forum, but there are a lot of political implications of a static revenue rate.
My own take is that we should be spending a few points more on jobs programs ($100-$200 billion a year) My worry is that we never follow through on reducing spending during good times, so the debt-as-percentage-of-GDP creeps up and up. This limits our ability to respond to crises, like the 2008 recession.
However, the budget deficit, while large, is a fraction of what it was a couple years ago. We seem to have stabilized, and are slowly growing and putting people back to work. Maybe 2% GDP growth is the best we'll do for the next couple years. I guess we could do a lot worse.
via JREF Forum http://forums.randi.org/showthread.php?t=267944&goto=newpost
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