Taxes, as a share of gross domestic product (GDP -- the output
of goods and services produced by labor and property located in
the United States), have remained fairly constant over time,
hovering around 18% to 21% of Q: Why then has Washington, D.C.,
gone from talk of surpluses to deficits, with federal revenue
charts looking like mountain ranges, with erratic peaks and
valleys? the economy drives the budget, not the other way
around. Picture GDP as a pie. Eighteen percent of a huge pie is
considerably more than 18 percent of a small pie. Therefore a
larger and more robust economy will result in more federal
revenue. policies would create a more robust economy? tax rates
create better economic conditions. It's simple: lower tax rates
= more robust economy = more federal revenue. Tax relief will
boost the economy's performance. To energize a soft economy,
lawmakers should seek far larger reductions in the tax penalties
that are imposed on productive behavior. The higher the rate,
the steeper the penalty. high