President Reagan asserted incorrectly last night that "we're getting the same percentage of gross national product in tax revenues" under today's lower tax rates than the government had collected under the higher rates in effect before Reagan and Congress reduced taxes in 1981.
In 1981, when Reagan took office, federal tax revenues totaled 20.8 percent of gross national product; this year, the White House estimates, they will total 19.2 percent of GNP. With total GNP now about $4 trillion a year, the difference between those two figures -- about 1.6 percent -- would represent about $63 billion in additional revenues.
If current tax rates yielded the same percentage of GNP in revenues as 1981 rates, as Reagan contended, this year's federal budget deficit would be less than $140 billion, instead of almost $200 billion.
Reagan also asserted incorrectly in his news conference that "if you look back in history, every time that you have sought through tax increase to increase government's revenue, you find out that you have placed a block in the path of progress and economic growth and you wind up with less revenue at higher rates."
Taxes have been raised in several ways since 1982, producing $47 billion in additional government revenues in 1984, and the economy has grown steadily.