NCPA - National Center for Policy Analysis

"Budget Surplus" Is Really "Tax Surplus"

July 10, 2000

The question of what to do with the federal budget surplus goes to the very heart of how we, as Americans, govern ourselves, say political analysts. Politicians who dig in their heels at the very idea of returning surplus revenues to taxpayers presume that government has first claim on the fruits of the individual taxpayer's labor.

We're not talking small change here.

  • This year's federal surplus is projected to hit $224 billion -- and expectations are for surpluses to hit almost $4.2 trillion over the next 10 years.
  • To put the numbers in perspective, consider that the private sector spends $108 billion a year on computers and $164 billion annually on industrial equipment.
  • Or compare this year's $224 billion surplus to the $197 billion spent on automotive imports -- or the $260 billion Americans invest yearly in single-family homes.
  • As for the $4.2 trillion, suffice it to say that it is equivalent to more than two years private-sector domestic investment -- which amounts to $1.7 trillion annually.

Those who don't want to return surplus funds to taxpayers frame the issue as a "budget surplus." But it isn't; it's a tax surplus. Tax cutters argue moneys which exceed government's spending policies actually belong to taxpayers and should be refunded for whatever consumption or investment purposes taxpayers fancy.

Source: William P. Kucewicz (, "Washington Has No Right to Run a Surplus," Wall Street Journal," July 10, 2000.


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