Bruce Bartlett walks through the budget. He makes the following observation about tax revenues:
According to the historical tables, federal revenues will only consume 14.4 percent of GDP this year – the lowest percentage since 1950. The postwar average is about 18.5 percent and there were many very prosperous years when revenues were considerably higher. In the late 1990s, they averaged more than 20 percent of GDP, which was a key reason why we ran budget surpluses.
The budget somewhat implausibly assumes that the ineffective Bush tax cuts will finally be allowed to expire at the end of 2012, as they are scheduled to do under current law. This causes revenues to raise to 17.9 percent of GDP in 2013, 18.7 percent in 2014, 19.1 percent in 2016, and 19.3 percent in 2016. In the long run, the budget assumes that revenues will remain at about 20 percent of GDP, even though total government spending will continue to rise to more than a third of GDP by 2080.
