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Obama's 63-year tax plan won't tame deficits, spending

November 27, 2012 | 4:58 pm | Modified: November 27, 2012 at 5:00 pm
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President Obama's latest budget plan includes a projection that taxes from 2022 to 2085 will remain at a historically high of 20 percent of gross domestic product, and even that won't erase the deficit, according to a Senate analysis.

The president's fiscal 2013 budget plan for a 63-year 20 percent tax take also has another problem, according to the Senate Republican Policy Committee: The U.S. has collected tax revenue over 20 percent of GDP just twice since 1930 and only once since the end of World War II.

"While marginal income tax rates have varied historically, government revenue collected has stayed within a limited range - between 15 and 20 percent of gross domestic product (GDP) in the post-WWII era," said the committee, headed by Wyoming Sen. John Barrasso.

"In coming years, entitlement and interest spending will skyrocket so quickly that typical levels of government revenue will be inadequate. Even if the federal government were to match the record collections of fiscal year 2000, the highest revenue level since WWII ended, it would fall dramatically short of what Washington will spend on just entitlements and interest," the GOP added.

According to figures based on the president's budget, Barrasso said that by 2042 entitlement spending will consume about 29 percent of GDP and by 2088, the deficit will be 9 percent of GDP. The deficit averaged 2.5 percent of GDP from 1968-2008.

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