Wednesday morning, President Obama released his long-delayed budget blueprint. Arriving more than two months after the statutory deadline, the budget contains a mix of increased spending, higher taxes and very little real deficit reduction. The White House is quick to argue that the increased taxes fall only on the wealthy, by limiting deductions and credits. The budget document itself, however, shows personal incomes taxes soaring 41%, as a share of the economy, over the next decade.
Buried deep on page 191 of Obama’s budget is a table showing tax collections as a share of the overall economy. Last year, personal income tax collections by the government equaled 7.3% of the economy. Under Obama’s budget, however, income tax collections as a share of the economy would spike to 10.3% by 2023. This represents a 41% increase in just a decade.
In others words, the government will take 41% more out of personal income than it did last year. This isn’t some “shared sacrifice” to whittle down the deficit or the overall debt, either. Even with the government taking so much more of the economy in taxes, spending will still outpace revenue collection.
Obama’s budget estimates that the total national debt was around $16 trillion last year. In a decade, however, Obama’s budget blueprint assumes that the total debt will climb to around $25 trillion, an increase of around $9 trillion.
The dramatic increase in income taxes does nothing to stem our fiscal challenges. The government will take 41% more out of the economy than it does today and still run annual deficits of hundreds of billions of dollars.
Obama’s own budget document confirms that spending, not revenue, is the problem.