August 17,2006

Grassley: CBO Shows Recent Tax Relief Doesn't Gut Revenue Base


To: Reporters and Editors
Re: Congressional Budget Office revenue projections
Da: Thursday, Aug. 17, 2006

Today the Congressional Budget Office released a report projecting that the revenue baseline
for FY 2006 to FY 2010 will average 18.3 percent of the Gross Domestic Product, at the post-World
War II historic average. That percentage is relatively unaffected by extending the alternative
minimum tax ("AMT") patch. This means that with the 2001-2003 bipartisan tax relief plans in full
effect, the revenue base has been sustained in terms of historic average. Sen. Chuck Grassley,
chairman of the Committee on Finance, with jurisdiction over taxes, made the following comment
on today’s findings.

“It’s pretty obvious that the critics of tax relief will ignore this report because it refutes their
point. The critics like to say tax relief guts the revenue base and causes rising deficits. But the
report clearly doesn’t support that assertion. In fact, the report shows that positive revenue changes
to the baseline in the FY 2006 and FY 2007 budgets far exceeded the revenue loss from the
reconciled and non-reconciled tax relief approved in this Congress. Spending is the problem, not
tax relief.”