The Congressional Budget Office has released its budget and economic outlook for 2022, and it shows that federal taxes are climbing to the highest levels in many, many years.
The report shows that federal tax revenues are soaring, increasing $800 billion, or 19%, this year, the largest one-year increase in 45 years. Total tax revenue as a share of the economy will reach 19.6% this year, the highest level in more than two decades, and a level exceeded only three times in our history. The report details how both individual and corporate taxes are rising to historically high levels.
Unfortunately, President Joe Biden and Senate Democrats are pushing to raise taxes even more.
According to the CBO, individual tax receipts will increase by nearly $600 billion this year, a 28% jump. Incredibly, individual tax receipts will reach 10.6% of the GDP. The nonpartisan CBO notes that this is “the highest amount of individual income tax receipts recorded since the income tax began in 1913.” This is nearly 40% higher than the average level over the last 20 years.
Corporate taxes are also surging in revenue terms, projected to reach record-high levels in the next few years. According to the CBO, corporate tax receipts this year will be 86% higher than in 2020, and will more than double from 2020 to 2024, increasing by 125%.
Corporate taxes as a percentage of GDP will climb to 1.8% in 2024, a level higher than the 40-year average of 1.66%. Over the next 10 years, corporate tax payments will total $4.755 trillion, $898 billion more than the CBO projected less than a year ago. Yes, you read that right: $898 billion more than the CBO projected less than a year ago. This $898 billion is more revenue than Treasury has estimated that even an increase in the corporate tax rate to 28% would raise!
Big-spending liberals might celebrate these figures. But with the economy slowing and interest rates rising, more taxes are the last thing we need. The White House and the Senate should shelve their tax increase agenda and focus on slowing down spending.
Bruce Thompson was a U.S. Senate aide, assistant secretary of Treasury for legislative affairs, and the director of government relations for Merrill Lynch for 22 years.
