I was reading An unbalanced budget on MSNBC (Slate division). The lead paragraph:

When he announced the record $455 billion federal deficit last week, Office of Management and Budget Director Joshua Bolten reassured Americans that the red ink will evaporate as soon as the economy perks up. In the long term, Bolten insisted, rapid economic growth will generate the federal revenues needed to close the gap.

The article talked about the structural changes to the tax code as a result of Bush's tax cuts, and asserted that, by changing where revenue comes from, it will be more difficult for the Federal government to realize the revenue in future years that would erase the deficit. The new tax code encourages the wealthy to shift their income sources to dividends, taxed at 15 percent, rather than ordinary income, taxed at a newly-lower 35%. In other words, when the economy starts picking up, Federal revenues won't pick up proportionately.

For example, instead of taking compensation in salary, those who can will choose to take income in dividends. (By increasing Citigroup’s dividend, as he did last week, outgoing CEO Sandy Weill just granted himself an annual stream of income of $32 million that will be taxed at 15 percent. Under the old regime, had he chosen to take that sum via options or a bonus, he would have paid more than twice as much in taxes.

Some evidence is offered: Although we've been told that the recession ended in 2001,

revenues fell 1.7 percent in 2001 and 7 percent in 2002. So far this year, they’re down another 3.5 percent. Federal receipts haven’t fallen for three straight years since the early 1920s.

(Stay with me, I'm almost there.)

The current budget predicts massive gains in federal revenues down the road — just as the administration’s previous two budgets did. The 2004 budget expects (hopes?) that revenues will grow by about 5 percent in 2004, by an impressive 11 percent in 2005 and then by between 5 percent and 6 percent in each of the three years thereafter.

So here's the question that came to mind: How much would the economy have to grow, given the new taxation structure, to produce the forecast growth in Federal tax revenue which is supposed to wipe out the deficit? What growth in the underlying economy would produce an 11% increase in tax revenue?

Seems a simple enough question, since somebody must have done the numbers to come up with those forecasts of tax revenues. But I've never seen that fundamental number. Seeing that would let us all gauge the reasonableness of the tax revenue forecasts derived from it. Is it something reasonable like 5%/year like we saw in the 90s? (How do you get 11% growth in tax revenue from 5% growth at the source, especially if you're taking a smaller cut?) Something with historical precedent?

Anybody know?