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1 1 (September 10, 2024)

handle is hein.crs/goveqoq0001 and id is 1 raw text is: Congressional ____ The FY2025 President's Budget in Historical Context Updated September 10, 2024 On March 11, 2024, the Biden Administration submitted its budget for FY2025, which proposes increased federal revenues, continued growth in mandatory outlays, and decreased discretionary outlays relative to the size ofthe economy. In June 2024, the Congressional Budget Office issued its analysis ofthe Administration's discretionary proposals and updated baseline estimates. This Insight discusses the Administration's fiscal proposals in the context oflonger-term budgetary trends and highlights selected events and legislation. Revenues Figure 1 shows federal receipts by major category as a share of gross domestic product (GDP) since FY1962. Federal receipts exceeded outlays (dark blue line) in five years (FY1969, FY1998-FY2001). In every other year, the government ran a deficit, which required borrowing through the sale of Treasury securities. Economic conditions and employment levels affect tax receipts, as do major tax measures. Individual income taxes and payroll taxes, such as for Social Security and Medicare, have long been the largest revenue components. Corporate income taxes as a share of GDP fell from 3.5% in FY1962 to 1.6% in FY2023. The Revenue Act of 1964 (proposed in 1963 by President Kennedy and signed in 1964 by President Lyndon B. Johnson) lowered high Korean War-era marginal tax rates. Other acts adjusted the tax code to offset bracket creep, where inflation pushed households into higher tax brackets. The 1981 Kemp-Roth act indexed brackets and cut marginal rates by about a quarter. The 1986 Tax Reform Act lowered marginal rates and curtailed many tax preferences while aiming to be budget neutral. A 1993 omnibus act increased certain taxes, helping to reduce deficits. Major tax acts in 2001, 2003, 2013, and 2017 reduced various tax rates. Congressional Research Service https://crsreports.congress.gov IN12340 CRS INSIGHT Prepared for Members and Committees of Congress

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