Bill Description: Senate Concurrent Resolution 115 would call for an Article V convention to amend the U.S. Constitution by adding a balanced budget amendment.
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Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?
Senate Concurrent Resolution 115 calls for an application to Congress calling for a convention of the states, limited to proposing an amendment to the Constitution requiring that, “in the absence of a national emergency, the total of all federal outlays made by Congress for any fiscal year may not exceed the total of all estimated federal revenues for that fiscal year, together with any related appropriate fiscal restraints.”
There are several major problems with this proposed amendment. To start with, it does not define what a national emergency is.
But more importantly it assumes that the problem is one of balancing the federal budget without regard to distinguishing between the growth of spending and the growth of revenue.
In no single year in U.S. history has federal revenue exceeded 20.5% of GDP. 1944 was the peak year, during the height of World War II. Top marginal income tax rates then were over 90%.
The modern revenue peak was 20% of GDP in 2000 at the height of the “Dot Com,” boom. Yet according to data sourced from the U.S. Office of Management and Budget, outlays (spending) are projected to average 24.8% of GDP for the period 2023 to 2028. Revenue for the same period is projected to be 19.2%, not far off the modern peak, and more than the post-WWII average of 17.2%.
Which means that unless Congress cuts spending by more than $8 trillion over the next five years, taxes will have to be increased beyond anything known in the history of the country. This spreadsheet offers details.
The proposal opens the door to a massive federal tax on sales and various forms of consumption, along the lines of the European system.
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