Federal Expenditures Rose from 2.7% to 24% of Economic Output
Washington, D.C., February 20, 2014— Federal, state, and local government taxation and spending have significantly increased over the past century, according to a new report by the nonpartisan Tax Foundation.
The report concludes that federal, and to a lesser extent state and local, tax and spending may be poised to increase substantially, citing an aging population and the Patient Protection and Affordable Care Act as driving forces being the possible boost.
“The PPACA includes an array of major new federal taxes, fees, requirements, and government assistance programs, and also puts upward pressure on state government spending,” said Tax Foundation Fellow Michael Schuyler. "The federal government has also promised Social Security and Medicare benefits to seniors without setting aside any real assets to redeem those promises.”
Additionally, the federal government has not funded some of the benefits it promises to federal workers after they retire, and many states and localities have inadequately funded their workers’ pensions.
“If the government sector expands further, it will become even more vital than it already is to trim unnecessary or low-return spending programs and to strive for simplicity, economic efficiency, and transparency in tax policy to grow the economy,” added Schuyler.
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