So the fiscal 2007 federal budget deficit, according to new numbers from the Office of Management and Budget, is $163 billion. Not a particularly big number for a $13 trillion economy. In fact, it works out to a scant 1.2 percent of gross domestic product. More interesting, the latest budget numbers reveal that tax receipts rose from 18.5 percent of GDP in fiscal 2006 to 18.8 percent of GDP in fiscal 2007. That level of receipts is above the 40-year historical average of 18.3 percent. Generally, when that happens, it creates an environment for tax cuts. Oh, here, by contrast, is the latest news from Congress via the Politico website:
By now, everyone knows Rep. Charles B. Rangel is poised to introduce the "mother" of all tax reforms, the biggest and most expensive tax code overhaul since 1986. But what they don't know is how the New York Democrat plans to pay the more than $1 trillion price tag—and that uncertainty is fueling rampant speculation from Capitol Hill to K Street.