June 15, 2007 8:53AM # Tax Revenues Hit All-Time Highs By [Daniel J. Mitchell](https://www.cato.org/people/daniel-mitchell) --- SHARE While Democrats plot to raise taxes (and Republicans indirectly help them by failing to push for smaller government), *Investor’s Business Daily* provides a useful service by [pointing out](http://www.ibdeditorials.com/IBDArticles.aspx?id=266627596553650) that inflation-adjusted tax revenues have reached record levels. And even when measured as a share of economic output, tax collections have risen above their long-term average (though the assumption that politicians automatically deserve a slice of additional economic output is a pernicious notion): > Tax revenues will be about 18.5% of GDP this year — above the average of 18.2% since 1960. As for inflation-adjusted tax revenues — a little-used but equally telling statistic — they’ll reach an all-time high of $2.013 trillion. That’s higher even than in the last year of the dot-com boom. And by the way, it’s an astounding 26% gain since 2003 — after inflation. What about the claim that tax cuts “lose” revenues for the government? Also not true. What is true is that by creating a dynamic of powerful economic growth, lower taxes expand the economy and, therefore, overall tax revenues. They do this by giving people more incentives to work, save, invest and innovate — all drivers of long-term economic growth. ##### Related Tags [General](https://www.cato.org/general), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).