April 15 is around the corner, and the taxman is happy. According to recent reports, federal tax revenues for the first five months of FY 2014 hit an all-time record, up more than $90 billion from last March. One might expect the U.S. government to be flush with cash, but of course, that isn't happening.
In fact, because spending is far outpacing even these increased tax revenues, Washington is expected to run a deficit of more than $514 billion this year.
And it only gets worse going forward. According to the nonpartisan Congressional Budget Office, over the next 10 years, the government's take of taxes as a percentage of the economy will continue to increase. By next year, taxes on the economy will exceed the historical average on their way toward record levels. But spending goes up even more, so that within 10 years, we are facing trillion dollar deficits, with no end in sight.
Yet President Barack Obama and most Democrats continue to fight for tax increases as a requirement for doing anything to address the nation's record $17 trillion debt. All efforts by Republicans to restrain spending are met with demands by Democrats for more tax increases.
In fact, the budget the president just sent Congress includes new taxes that far exceed any savings on the spending side. Roughly speaking, the president proposes $1.8 trillion in new taxes and revenues, and turns around and puts $900 billion of that toward new federal spending.
Most Republicans and Democrats generally agree that our out-of-date, overcomplicated and uncompetitive tax code is in desperate need of reform. Our individual tax code is a monstrosity of labyrinthine dimensions that Americans are forced to navigate every April 15.
To make matters worse, we have the highest corporate tax rates in the developed world. That and our out-of-date international tax system push investment and jobs overseas. At the same time, because our code is riddled with loopholes and carve-outs, some companies are able to avoid paying taxes altogether. The tax code cries out for reform.
With long-term unemployment at record levels and millions of Americans barely making ends meet, more taxes are the last thing we need. Obama should understand this. His own former chairwoman of the Council of Economic Advisors, Christina Romer, has concluded a tax increase of "1 percent of GDP lowers real GDP growth by roughly 3 percent." In other words, for every dollar the government takes out of the American taxpayers' pockets, it also takes three dollars out of the economy, slowing growth and killing jobs.
I hope this latest news from the IRS about significant increases in revenues from taxes this year will help make the point that we are not undertaxed. Then maybe we can get Democrats to change their focus from raising taxes to joining us on dealing with the issue that matters most to the American people: creating more jobs and more opportunity.