In the wake of the House passing its $3 trillion tax, spend and borrow bill that now heads for a showdown in the Senate, we can’t resist saying it again: America does NOT have a problem of too LITTLE tax revenue. As the chart below shows, federal tax collections have been remarkably constant over the past four or five decades at between 17 and 19% of GDP. Even without any NEW Biden taxes, the tax share of the economy is expected to creep upward over the next 30 years.
On the expenditures side of the ledger, federal spending is expected by CBO to keep climbing each year for the next several decades from about 25% of our GDP to nearly 35%. That is NOT COUNTING the new Biden multi-trillion spending spree. If that is added in and Congress passes the Build Back Broker bill, these expenditures will catapult to more than 50% of GDP over the coming decades.
If we allow that to happen, America won’t be America anymore. It will be the socialist paradise that Bernie Sanders and AOC dream about.