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The government does not have an under-taxing problem; it has an overspending problem. Tax revenue has remained relatively static in the modern era; since 1970, federal tax revenues have averaged 18 percent of Gross Domestic Product (GDP). Even if all expiring tax relief is extended, the Congressional Budget Office (CBO) expects revenues to remain at this average for the next decade. In contrast, federal spending has historically topped 21 percent of GDP, and stands to increase to over 23 percent indefinitely under current spending projections.
Similarly, the government does not have a “deficit” problem. Policy crafted to confront the deficit distracts from the real problem of government spending. Stopping the overspending addiction is the necessary first step to confronting the nation’s deficits.
The Cost of Government Center follows the annual budget process and encourages prudent decisions by authorizors and appropriators. Both Americans for Tax Reform and the Center work with policymakers to implement lasting solutions to the looming entitlement crises. The Center urges policymakers to weed out waste, fraud and abuse in all corners of the federal budget and promotes comprehensive budget reform that instantiates restraint in federal spending.
The Center’s work on federal spending falls under these main categories: