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InsiderOnline Blog: March 2013

Losing Limitedness

The annual budget from House Budget Committee Chair Paul Ryan isn’t quite the limited-government standard that it used to be, says Dan Mitchell, who notes the good and the bad of this year’s edition:

[F]ederal spending grows by an average of 3.4 percent annually, and that modest bit of fiscal discipline is enough to reduce the burden of government spending to 19.1 percent of economic output by 2023. […]

[T]op tax rates would be reduced to 25 percent and many forms of double taxation, like the death tax and capital gains tax, presumably would be reduced or eliminated. […]

But:

[T]he budget assumes that the federal tax burden should remain at about 19 percent of GDP, higher than the long-run average of 18 percent of GDP and—for all intents and purposes—permanently enshrining Obama’s fiscal cliff victory. […]

Two years ago, [Ryan] put forth a budget that limited spending so that it grew 2.8 percent per year. Last year, he put forth a budget that limited spending so that it grew 3.1 percent per year. Now, spending will climb 3.4 percent per year. [Cato Institute, March 12]

Posted on 03/15/13 12:12 PM by Alex Adrianson

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