President Obama’s most recent “fiscal cliff” offer to Speaker John Boehner calls for $1.2 billion in new tax revenues over the next decade. But, as Jim Pethokoukis is pointing out, the CBO projects that economic growth over the next decade will create $2.2 trillion in new tax revenues without raising taxes.
If we keep the status quo tax situation, revenue as a share of GDP will rise by nearly 40% — from $2.4 trillion in 2012 to $3.4 trillion in 2016 — through greater economic growth. Over the next decade, tax revenue would rise by $2.2 trillion.
And growth won’t even be that great, according to the CBO, with GDP increasing by an annual average of closer to 2% than 3% between 2013 and 2022.
Wouldn’t it be better to boost to raise tax revenue — and incomes — through economic growth than by raising tax rates?
Well, yeah, especially when tax hikes would undoubtedly diminish that revenue growth by throwing a bucket of cold water on the economy.