Quote:
Originally Posted by finnbow
Because all of them passed supply-side tax cuts and thereby significantly increased the deficit. Try to keep up, Mike.
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Oh, so now you ARE blaming them...
We've been down this road before. Yes, in the year following the tax cut, there's a revenue reduction because the tax cut's effects on revenue are not immediate. We've agreed before that the lack of consistency in tax policy in this country makes business planning more challenging. Also, on a personal income tax level, a tax cut this year for many folks isn't realized until next year when they file their federal taxes and get their federal tax "refund".
For better or worse as we've seen recently, Federal tax cuts are not accompanied by a commensurate reduction in Federal spending. It's not even accompanied by a willingness to keep spending at the same levels year over year adjusted for inflation. It sometimes seems lost in this discussion is that a budget deficit is defined by a lack of balance between revenue and expenses. The appetite to manage expenses in DC died long ago.
But, rolling forward the revenue increases become evident.
https://www.politico.com/news/2021/1...andemic-515792
Despite a pandemic, a recession, and a slew of tax cuts, federal tax receipts are booming.
Revenues jumped 18 percent in the fiscal year that just ended, analysts say — the biggest one-year increase since 1977.
That translates into $627 billion more than in 2020, according to the nonpartisan Congressional Budget Office, which estimates that, for the first time, total government revenues topped $4 trillion.
That said, in a sane world lower revenues SHOULD BE the goal of tax cuts. The tax cuts allow individuals to keep more of their earnings and serve as a check and balance on the runaway growth of the Federal government. But this isn't a sane world, or at least, the world inside the DC beltway parted company with sanity long ago.