Quote:
Originally Posted by finnbow
One must estimate what revenue would have been before one can estimate the impact. Also, the tax cuts will be diminishing revenues thru 2025, not 2021.
https://www.cnbc.com/amp/2019/12/05/...ts-report.html
U.S. tax revenue as a proportion of GDP dropped the most out of any country in the Organisation for Economic Co-operation and Development in 2018, according to a report released Thursday.
That's largely due to the $1.5 trillion GOP tax cut President Donald Trump signed into law in 2017.
And there is more:
Corporate tax revenues fell 31% in the first year after the cut was passed. Overall tax revenues have declined as a share of the economy in each of the two years since the tax cut took effect.
https://www.npr.org/2019/12/20/78954...-gops-promises |
This may be news to you, but a percentage is another way of expressing a fraction. Fractions are made up of a numerator and a denominator.
So, a percentage can increase by increasing the numerator, but it can shrink by increasing the denominator.
So, if corporate profits were flat, which overall they were in 2018, and GDP increased to nearly 3% in the same year (from 2.2% in 2017), wouldn't you expect tax revenues to decrease as a percentage of GDP? In other words, GDP rose sharply in 2018 but tax revenues were nearly the same as 2017 because there wasn't a matching increase in corporate profits to tax.
In other words, I'm not buying the explanation provided by a lefty trade organization. They were probably still pissed at Trump for supporting Brexit when they wrote that piece.