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Increase taxes to balance budget
In the national media there is a great deal of discussion taking place about the federal budget. In this regard it is interesting to look at some of the Congressional Budget Office's information concerning the country's fiscal history.
The most recent time the federal budget was balanced during a Republican administration was fiscal year 1960. Eisenhower was president. In this year the top personal tax rate was 91 percent and for corporations it was 52 percent.
The most recent fiscal years when total federal income exceeded expenses were fiscal years 1998 through 2001 inclusive. These were the ones for Clinton's second term. At this time the top personal tax rate was 39.6 percent and the top corporate rate was 35 percent. On average the federal government's total income was equal to 20.0 percent of the gross domestic product (GDP) and expenses amounted to 18.5 percent of GDP.
Following Bush's election, the top personal tax rate was reduced to 35 percent and the top corporate tax rate remained at 35 percent. The federal government has not had a balanced budget since this tax reduction. For the fiscal years 2002 through 2008 inclusive, the ones that preceded the recession, federal total income fell to an average of 17.3 percent of the GDP. With increased commitments such as the cost of two wars, expenses rose to 19.8 percent of GDP. The situation worsened during fiscal years 2009 and 2010 due to the impact of the recession.
While it is unpleasant to contemplate, increased taxes will be required for a balanced federal budget.
JOHN R. PIEPHO, Cape Girardeau