National Center for Policy Analysis: Lower Combined Tax Rate Would Spur Economy

Article excerpt

If the U.S. combined tax rate had been held to 23 percent of gross domestic product from 1950 to 2004, government at all levels would have collected $61.9 trillion more in taxes, according to a study by the National Center for Policy Analysis.

"This is enough money to have funded all actual spending programs enacted during that period with no public debt," said Gerald Scully, senior fellow at the conservative think tank based in Dallas.

Scully said federal, state and local tax revenues as a share of GDP have not been as low as 23 percent since 1950 and have averaged between 30 percent and 34 percent for years.

While some activities of government contribute to economic growth, Scully determined, when government becomes too large, it slows economic growth.

Had taxes been held to the optimum 23 percent of GDP, Scully said, the national economy would have grown at 5.8 percent per year, rather than the actual 3. …