It’s an often-repeated talking point among Republicans as Washington debates taxes and spending: “We don’t have a revenue problem, we have a spending problem.” It’s recycled, like much of today’s Republican thinking, from President Reagan, but Sen. Jim DeMint (R-SC) stretched the argument to its breaking point on MSNBC this morning when he said that government revenues are currently at “record” highs:
DEMINT: Four of the last five years, we’ve had record levels of revenue. And next year we have projected the highest revenue levels in history. We don’t have a revenue problem.
The GOP talking point on spending vs. revenue fundamentally un-serious, as both are flip sides of the same balance sheet. But even so, DeMint is just wrong.
DeMint appears to be using nominal dollars to measure revenues, instead of revenue as a percentage of GDP, which is used by all official arbiters on revenue matters, including the Congressional Budget Office. And as a percentage of GDP, government revenue is nowhere near a “record” high. In 2010, it was at its lowest level in more than 60 years, according to data from the Office of Management and Budget (OMB), at just at 14.9 percent.
Next year, revenues will still be at just 16.6 percent of GDP, several points below the average rates under every president since Franklin Roosevelt, including Reagan. The record high was 20.6 percent in 2000, which coincided with a balanced budget.
This makes sense — on top of lost revenue from the massive Bush tax cuts, the recession devastated economic output and thus the American tax base.
And DeMint seems to know this, choosing to qualify his statements about revenue with the odd time frame of five years to completely mislead viewers. He’s right that revenues in terms of dollars were at an all time high at one point in the last five years — 2007 — but he seems to intentionally ignore the fact that revenues fell of a cliff in 2009. In terms of actual dollars, in 2010, the government brought in $2.16 trillion dollars — down from $2.56 trillion in 2007.