Projections have the deficit declining to 0.3% of GDP by 2015... with individual income taxes rising from 7.6% to 10.3% of GDP, while corporate taxes decline from 2.2% to 1.5% of GDP.
Update from CBO's October 6, 2005, Monthly Budget Review:The federal budget deficit totaled about $317 billion in fiscal year 2005, CBO estimates, $96 billion less than the shortfall recorded in 2004. Relative to the size of the economy, that deficit is equal to about 2.6 percent of the gross domestic product (GDP), down from 3.6 percent in 2004. Growth in revenues--from 16.3 percent of GDP in 2004 to about 17.5 percent in 2005--accounted for the improvement. Federal spending was approximately 20 percent of GDP in 2005, slightly higher than the corresponding percentages in 2003 and 2004. Hurricanes Katrina and Rita had relatively little effect on the 2005 budget results because they occurred so late in the fiscal year.
So, let's get this straight; during the time that the budget is projected to grow from $2.1 trillion to $3.8 trillion:
- Individual income taxes as a portion of GDP will increase almost 36% while corporate taxes will drop by 1/3
- Discretionary spending will decline; mandatory spending and interest will increase
- Debt will increase by about 50%