Revenues to the federal government are expected to substantially increase as a factor in President Biden’s new fiscal year budget, largely due to an increase in the nation’s corporate income tax rate.
So says the Congressional Budget Office is an overall estimate of the Biden Administration’s group of budgetary proposals submitted to Congress.
According to CBO projections, the President’s proposals will ultimately result in a budget deficit of some $13.1 trillion between now and the year 2032. On average, those deficits would be equal to around 4.2% of the Gross National Product.
But the CBO report also notes that a national corporate income tax rate, increasing from 21% to 28%, will likely result in higher-than-expected revenues to the federal government.
In fact, the Administration is projecting that revenues will average somewhere in the range of 18.3% and 19.0 % of GDP for every year between 2023 and 2027, jumping to 18.7% of GDP between 2028 and 2032.
The report also notes that as a share of GDP, mandatory outlays are expected to “decline in 2023 and 2024 and gradually rise thereafter, averaging 14.5% of GDP from 2023 to 2032.” Those outlays, by contrast, have averaged just under 11% for every budget year dating to the 1970s.
Discretionary outlays for defense programs, meanwhile, are expected to drop from the current 3% of GDP to around 2.4% by the year 2032.
Created during the administration of President Gerald Ford in 1975, the Congressional Budget Office is tasked with providing independent analyses of government budget matters to Congress, producing dozens of reports yearly to Congress and the public.
By Garry Boulard
