Report discussing fact that taxes as a percent of income were lower in 2009 that they have been in 60 years. The lower is not a typo. In fact, they have been cut since President Obama took office. About ~$250 B of the ~$800 B stimulus was tax cuts (that will expire in 2011 unless extended). Of course, the only thing worse than tax and spend is don't tax and still spend. To have a responsible federal budget taxes will have to rise and spending will have to drop over projected levels. All the balanced budgets achieved since World War II have come when the total federal tax receipts (all sources) were around 20% of GDP. They were 15% of GDP in 2009 due to recession, and the tax code we have now will bring in around 17% of GDP in a normal economy.
I think there needs to be a reconsideration of the mix of taxes used, but if the federal government's receipts aren't around 20% of GDP we will have a deficit.
There is a certain delusional quality to much of the conservative congressional candidates 'pledging', at least in North Carolina. One of the House challengers who won their primary last week is pledging to restore fiscal sanity to Washington. And this is her plan from best I can tell:
*Continue the 2001 and 2003 tax cuts
*Have further federal income tax cuts
*Have no cuts from Defense, Social Security, or Medicare (the federal spending of these 3 combined, if you include Medicaid, are equal to around 15% of GDP).
Again, the only thing worse the uncontrolled tax and spend, is don't tax, but still spend.