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Curmudgeon
"Go Figure: Tax Revenues Climbed $18 Billion In First Month
Thu Feb 8, 2018 6:47pm
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Of GOP Tax Cuts ...

"This doesn't mean the tax cuts will 'pay for themselves.' But don't be surprised if revenues come in higher than the CBO had expected. The CBO forecast a measly 2.2% GDP growth for this year, and an even more anemic 1.7% for 2019, when it calculated the impact of the tax cuts. Any tax-cut-fueled economic growth above that will mean more revenues than expected."


Sure worked for both JFK and Reagan, and will work again for President Trump. I love it!
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Go Figure: Tax Revenues Climbed $18 Billion In First Month Of GOP Tax Cuts
2/07/2018

Fiscal Policy: The Congressional Budget Office says that federal revenues in January added up to $362 billion. That's an increase of $18 billion— or 5.2% — from the year before. As a result, the government ran a surplus of $51 billion that month, which is equal to the previous January.

Wait, weren't the tax cuts supposed to bankrupt the country to benefit the rich? It almost looks like the tax cuts — which took effect in January — are paying for themselves.

That wouldn't be fair, either. As the CBO notes, the new payroll withholding scheduled hadn't fully taken effect in January; companies don't have to update their employee tax withholdings until the middle of this month. When that happens, monthly revenues from individual income taxes will likely slip.

But the latest CBO report does show how a growing economy can make up a lot of the difference between the advertised price of a tax cut and the actual impact on revenues.

The same report says that revenues for the first four months of the current fiscal year — which started last October — were $46 billion higher than the same period the year before.

Individual income and payroll taxes, it says, rose by $68 billion. "That change largely reflects increases in wages and salaries," the CBO says.

Those gains in wages and salaries are likely to continue, if not accelerate, under the tax cuts.

Think about it this way. Those 3 million-plus workers who are getting bonuses and raises thanks to the Trump tax cuts will end up paying more in taxes on those extra earnings, offsetting at least some of the tax cuts they will enjoy this year.

What's more, the fact that employment gains continue to be strong means more people will be earning taxable wage income. It also means fewer people collecting government benefits, which will mean less government spending than would otherwise be the case.

In fact, the CBO report says that "Medicaid spending has slowed slightly this year, perhaps related to declining unemployment and a number of other factors."

In addition, companies that are bringing money they had parked oversees — because of the excessively high U.S. corporate tax rate — back into the U.S. because of the corporate tax cuts, will be making tax payments they wouldn't have otherwise.

This doesn't mean the tax cuts will "pay for themselves." But don't be surprised if revenues come in higher than the CBO had expected. The CBO forecast a measly 2.2% GDP growth for this year, and an even more anemic 1.7% for 2019, when it calculated the impact of the tax cuts. Any tax-cut-fueled economic growth above that will mean more revenues than expected.

No matter what happens on the revenue side, the CBO report also makes it clear that federal spending must be brought under control. While revenues climbed by $46 billion so far in the fiscal year, spending shot up by $62 billion.

That's an unsustainable trajectory in anybody's book.



https://www.investors.com/politics/editorials/revenues-climb-5-2-in-first-month-of-gop-tax-cuts/

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