We Don't Need a Tax Increase | Richard W. Rahn | Cato Institute: Commentary

We Don't Need a Tax Increase | Richard W. Rahn | Cato Institute: Commentary: "In the 40 years prior to the 2007-09 Great Recession, tax revenues as percentage of gross domestic product were remarkably constant, never varying more than 2.3 percent above or below 18.3 percent of GDP. This fact is all the more remarkable given that the maximum individual income tax rate during this period varied from a low of 28 percent to a high of 70 percent."

"the current tax regime, in normal times (with normal economic growth rates — approximately 3 percent), will produce enough tax revenue to cover the historical rate of spending with only a small and manageable deficit. The current long-term deficit and GDP-to-debt problem was caused by a big jump in federal 'stimulus' spending over the past three years — not the Bush tax cuts."

"Saying a bigger government is a necessary evil because of the rising cost of 'entitlements' misses the point that under present law and practice, the costs of the entitlements never stop rising as a percentage of GDP until they consume the whole pie, which obviously will not happen."