Apparently, the maximum revenue from income taxation is 19% of GDP, regardless of tax rate. The implication is that a) this should be the maximum size of government spending as well and b) that we should have rates in place that maximize economic growth. But that doesn’t satisfy the class-envy warfare mentality of the left, including the president.
4 thoughts on “Grow The Pie”
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Evidence that doesn’t fit their world view is easily ignored. But then to suggest that spending be kept within revenue… you’re really crossing the line there. Sorry, you have no future in government. /sarc
That chart leaves off the most recent years. In 2009, taxation as percentage of GDP fell sharply and will remain low in 2010.
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205
I would be entirely fine with 19% as a target – rarely go above or below that target – except in time of war.
Considering our level of debt, we should limit spending to quite a bit less than 19% of GDP for a while.
2009 and 2010 taxes as percentage of GDP fell because GDP was 40% was government (largely deficit) spending.