The U.S. Federal Deficit fell to 15.6% of federal government receipts in Q3 2005. At this level, the deficit was 3.3% of household income, which was about the same ratio to household income as in 1995.

(See Flow of Funds Tables F106 and F100, and the graph, below.)

Since taxation of individuals is the primary source of revenue for the federal government, the relationship between the deficit and before-tax household income is an indication of the manageability of the deficit. This number suggests how much of household income would have to be taxed away to eliminate the current deficit.

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