Fox & Friends misleadingly claimed that federal revenue will be historically high this year to push against calls for additional tax increases. In fact, projected revenue as a percentage of gross domestic product (GDP) remains below the historical average since World War II.
Fox & Friends Uses CBO Report To Claim Revenue Is “Historically High”
Congressional Budget Office Projects $2.7 Trillion In Revenue For 2013. The latest Congressional Budget Office (CBO) report on the 10-year budget and economic outlook projected total revenues in fiscal year 2013 at $2.7 trillion:
[Congressional Budget Office, February 2013]
Gretchen Carlson: Revenue “At An All-Time High.” Fox & Friends co-host Gretchen Carlson cited the CBO report to claim projected 2013 revenue will be “at an all-time high” and that the projected $2.7 trillion in revenue was “an all-time record breaker.” [Fox News, Fox & Friends, 3/5/13]
Brian Kilmeade: Revenue Is “Pretty High, Historically High.” Co-host Brian Kilmeade said “it turns out our revenue is pretty high, historically high.” During the segment, on-screen text read: “Taxed to the Max: Tax Revenue Will Hit Record High In 2013.”
[Fox News, Fox & Friends, 3/5/13]
Steve Doocy: “We're Taking In Plenty, We've Never Taken In More.” Co-host Steve Doocy claimed the revenue projections prove that “We're taking in plenty, we've never taken in more. But we just spend a whole lot. And of course, the President of the United States wants the Republicans to cave on taxes. It's all part of his plan.” [Fox News, Fox & Friends, 3/5/13]
In Fact, Revenue As Percentage Of GDP Is Lower Than Historical Averages
Tax Policy Center's Bob Williams: It Doesn't Make Much Sense To Talk About Revenues Only In Dollar Amounts. FactCheck.org quoted Bob Williams of the nonpartisan Tax Policy Center explaining that “it doesn't make much sense to talk about revenues only in nominal dollars,” so economists prefer to look at “revenues as a percentage of the gross domestic product” :
In nominal dollars, the federal government is expected to take in just over $2.7 trillion in revenues this year, according to the Congressional Budget Office (see Table 1-1). That's higher than any year in history. The previous high was $2.57 trillion in 2007.
But Bob Williams of the nonpartisan Tax Policy Center said it doesn't make much sense to talk about revenues only in nominal dollars. That doesn't account for growth in population, inflation or the growth of the economy. Say, for example, the population doubled, Williams said. You would expect the amount of revenues to double as well. So revenues would increase without the need to raise tax rates. But spending would have to go up to provide services to twice as many people. The same is true for growth in inflation and growth in income. That's why most government numbers crunchers prefer to look at revenues as a percentage of the gross domestic product, which accounts for those factors. [FactCheck.org, 2/28/13]
CBO: Revenues In 2013 Will Equal “16.9 Percent Of GDP ... Still Below The Average Of About 18 Percent Of GDP Over The Past 40 Years.” According to the CBO report Fox & Friends cited, the revenues in 2013 would equal only 16.9 percent of GDP, “below the average of about 18 percent of GDP over the past 40 years.” [Congressional Budget Office, February 2013]
FactCheck.Org: “As A Percentage Of GDP, Revenues This Year Are Actually Lower Than The Historical Average Since World War II.” A FactCheck.org review of House Speaker John Boehner's similar claim found the claim to be true in “nominal dollars,” but explained that as a percentage of GDP, revenues this year are lower than the historical average since World War II of 17.7 percent:
House Speaker John Boehner claimed the federal government will take in more revenue this year than any other year in history. That's true in nominal dollars, but not as a percentage of gross domestic product -- a measure preferred by most economists that accounts for growth in population, inflation and earnings.
In fact, as a percentage of GDP, revenues this year are actually lower than the historical average since World War II.
The report included the following graph:
Revenue As Percentage Of GDP Was Higher Than 16.9 Percent During Most Years Of The Bush Administration. According to historical data tables from the CBO, revenue as a percentage of GDP was higher than the current 2013 projection for six out of the eight years between 2001 and 2008. [Congressional Budget Office, February 2013]