The Joint Committee on Taxation yesterday released Revenue Estimates of Selected Tax Policies Relating to the 2001 and 2003 Tax Acts (JCX-54-08):

The CBO projects that total revenues for the Federal government will increase from $2.7 trillion in fiscal year 2008 to $4.5 trillion in fiscal year 2018. To get a better sense of what these figures mean for American taxpayers, some analysts find it useful to convert these nominal dollar amounts into a fraction of U.S. GDP. As a percentage of GDP, CBO’s projection of Federal revenues rises from 18.7%for FY2008 to 20.3% for FY2018.

This brief looks at how several widely discussed tax policy options would affect total Federal government revenues as a fraction of GDP. In particular, this brief estimates the revenue consequences of extending the tax reductions adopted by the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (“JGTRRA”) that expire at the end of 2010, either with or without also amending the individual AMT, The EGTRRA and JGTRRA temporary income tax reductions included reductions in individual tax rates, the introduction of a new 10% tax bracket for individuals, expensing of certain capital investments for small businesses, and reduced tax rates on certain dividend income and capital gains.