Cut Taxes Before Congress Spends Surplus
January 12, 1999
Federal revenues are outstripping real government spending increases. But that could quickly reverse, economists warn, if and when the economy heads south. Now, tax-cut proponents argue, is the perfect time to give American taxpayers some relief.
- Federal receipts increased 9 percent last fiscal year, says the Congressional Budget Office -- creating a $70 billion budget surplus.
- Individual income tax receipts grew an incredible 12.4 percent -- reaching 20.5 percent of gross domestic product, up from 19.8 in 1997.
- At the same time, federal spending grew 3.2 percent -- while inflation increased just 1.6 percent.
- Tax receipts are estimated to grow at a rate of 3.65 percent over the next decade -- while government spending increases at a rate of 3.08 percent.
With the income tax burden already at its highest peacetime level in U.S. history, economists expect an eventual decline in tax receipt growth. Congress has already boosted "emergency" spending in the 1999 fiscal budget by $21.4 billion -- which is expected to cut next year's surplus by $17 billion.
These realities, experts say, make the case that the time for a tax cut is now -- if a cut is ever to be had.
Source: J.T. Young (U.S. Senate Republican Policy Committee), "Why Not Cut Taxes?" Investor's Business Daily, January 12, 1999.
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