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No, Tax Cuts Arenít Causing the Latest Deficit Spike
Issues and Insights ^ | 06/14/2019 | John Merline

Posted on 06/14/2019 10:28:10 AM PDT by SeekAndFind

The Treasury Department reported a $208 billion deficit for the month of May — which is $61 billion higher than May 2018. To put that in perspective, the deficit for the entire year of 2007 was $161 billion.

In the first eight months of the current fiscal year, red ink has already reached $738 billion. Even adjusting for inflation, the total annual federal deficit has exceeded that only six times in the nation’s history (five of them under President Obama).

Not surprisingly, the Republican tax cuts are taking the blame for this year’s extraordinary deficits.

But wait a minute. Overall federal revenues were up in May by $15 billion — that’s a 7% gain over May 2018 — the latest monthly Treasury report shows.

So where did May’s big deficit increase come from? Well, spending in that month was $440 billion. That’s $76 billion — or 21% — more than last year.

Some of that increase in spending in May was the result of a quirk of the calendar. But the same trend holds true for the fiscal year.

For the first eight months of the fiscal year (which started last October), revenues climbed more than $50 billion, compared with the first eight months of the previous fiscal year.

The press has focused on the fact that Trump’s tariffs boosted customs duties by $20 billion so far this year.

But that conveniently overlooks the fact that individual income tax revenues are up by $17 billion, and payroll taxes are up more than $30 billion. Both are signs of a healthy job market that pushed the unemployment rate to 50-year lows and is boosting wages as the labor market tightens.

Over these same eight months, however, spending exploded by almost $257 billion — an eye-popping 10% increase.

And where have the big spending increases come from? Mostly from entitlements and interest payments on the national debt.

Spending by Health and Human Services — which runs Medicare and Medicaid — is up more than $100 billion so far this year. Social Security spending is up by $47 billion. VA spending is up $26 billion. Interest on the debt, up $36 billion.

Spending on aid to children and families, in contrast, climbed a mere $1 billion.

And while overall Defense spending is up $49 billion, less than half of that — $20 billion — went toward new equipment and R&D.

So once again, we have the data showing the out-of-control spending is driving up the deficit, not Trump’s tax cuts. Yet it’s tax cuts that get the blame.

This is the swamp in action. The denizens of Washington want the government to grow perpetually bigger. So blaming deficits on tax cuts keeps the focus off the spending side of the equation.

The truth is that any tax hikes would, at best, only mask the problem of runaway entitlements, and put off the inevitable day of reckoning.


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: boycotts; crime; deficit; illegals; incometaxes; medicaid; medicare; sanctions; spending; tariffs; taxcuts; taxcutsandjobsact; taxreform; tcja; trade
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1 posted on 06/14/2019 10:28:10 AM PDT by SeekAndFind
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President Donald J. Trump and the Free Republic of the United States of America
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2 posted on 06/14/2019 10:34:50 AM PDT by DoughtyOne (This space for rent...)
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To: SeekAndFind

Bookmark


3 posted on 06/14/2019 10:40:42 AM PDT by Mase (Save me from the people who would save me from myself!)
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To: SeekAndFind

> we have the data showing the out-of-control spending is driving up the deficit, not Trump’s tax cuts <

That is a very good point! But it is also worth noting that those spending bills were approved by a GOP Senate, and then signed by Trump. No one has clean hands here.

(And yes, I know that Trump had to sign those bills to get what he wanted. Nevertheless, I’m sad to see that everyone involved is just kicking the deficit can down the road.)


4 posted on 06/14/2019 10:43:37 AM PDT by Leaning Right (I have already previewed or do not wish to preview this composition.)
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To: Leaning Right
> we have the data showing the out-of-control spending is driving up the deficit, not Trump’s tax cuts <

Partner, you hit a homerun with this statement.

There has to be cuts in the U.S. Budget but we have Nancy Pelousy as the Worst Speaker in the House.

Nancy was fired by the electorate in 2010 since she really could not handle the Speaker's job since she spent more money and she even had a Boeing Jetliner stocked with the best Liquors money can buy for her treks to the West Coast and back to D.C.

This is what President Trump has to contend with every single day. Then President Trump has the Mitch McConJob as the Senate Majority leader and he is a Rino.

The MSM will not say a thing about the above statements since we have the crying, lying thru your teeth, back stabbing, treacherous and traitorous MSM ever against a Republican POTUS. This is the main reason President Trump has to tweet.

5 posted on 06/14/2019 10:55:35 AM PDT by TheConservativeTejano (God Bless Texas...)
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To: Leaning Right

I’m not convinced everyone is kicking the ball down the road.

You touched on the fact Trump had to sign to get some important things. What else could he do? Refuse to sign. Refuse to get some very important things remedied?

One thing the Republicans could do if they ever get the majority again, and have the guts to actually act like Conservatives for once, is pass a line item veto for the president.


6 posted on 06/14/2019 10:55:37 AM PDT by DoughtyOne (This space for rent...)
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To: SeekAndFind

SPENDING causes deficits, not lower taxation.

There is a law on the books that states that the Federal government can not spend more than it takes in. This law was adopted in 1981, Public Law 95-435, Section 7.  It’s still valid, so why do our elected officials in Congress not obey that law?
 
That raises a number of other questions.   Is there a penalty clause for violations of the law?  Can every politician who voted in favor of violating the law be punished?  Is a violation a misdemeanor or a felony?  Who would be in charge of prosecuting the offenders?
 
We the people are expected to obey the law; why won’t we hold our servants (who have, regrettably, morphed into masters) to the same standard?
 
Finally, since the law is already being ignored, what makes us think that an amendment would not also be ignored?  The Second Amendment being a prime example in New Jersey; what part of “shall not be infringed” do they not understand?


7 posted on 06/14/2019 10:56:36 AM PDT by JimRed ( TERM LIMITS, NOW! Build the Wall Faster! TRUTH is the new HATE SPEECH.)
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To: JimRed
Finally, since the law is already being ignored, what makes us think that an amendment would not also be ignored?

This was the text of a letter to the editor I submitted some years ago; it refers to a balanced budget amendment proposed at the time.

8 posted on 06/14/2019 10:59:59 AM PDT by JimRed ( TERM LIMITS, NOW! Build the Wall Faster! TRUTH is the new HATE SPEECH.)
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To: DoughtyOne

> You touched on the fact Trump had to sign to get some important things. What else could he do? <

Yeah, in many ways you’re right. And that’s why this deficit problem will never be solved. NEVER. So there’s only one possible end to this story: runaway inflation as the Fed’s ramp up the printing presses.

The only question is when. Not for at least 15 - 20 years, I think.


9 posted on 06/14/2019 11:03:05 AM PDT by Leaning Right (I have already previewed or do not wish to preview this composition.)
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To: SeekAndFind
The never cutters have been in charge for decades. There is some odd belief out there that by increasing government spending and cutting taxes that the economy will take care of the deficit. That has been thrown to the curb again by reality.


10 posted on 06/14/2019 11:08:53 AM PDT by Theoria (I should never have surrendered. I should have fought until I was the last man alive)
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To: SeekAndFind

Bump


11 posted on 06/14/2019 11:09:43 AM PDT by Incorrigible (If I lead, follow me; If I pause, push me; If I retreat, kill me.)
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To: Leaning Right

It is a problem, and we need to address it.

I don’t know of a way other than the line item veto for the president.

That way he can stop the ability for the House members to vote each other as much as they can plunder from the federal budget.

Until then, we’ll face this problem.


12 posted on 06/14/2019 11:13:45 AM PDT by DoughtyOne (This space for rent...)
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To: DoughtyOne

“But that conveniently overlooks the fact that individual income tax revenues are up by $17 billion, and payroll taxes are up more than $30 billion. Both are signs of a healthy job market that pushed the unemployment rate to 50-year lows and is boosting wages as the labor market tightens.”

Funny how Corporate Income Tax numbers are conveniently not mentioned.... Could it be, that they are DOWN from last year?

If they are, and since this article explicitly leaves them out, then you better believe they are, that, like it or not, falls at the feet of the tax cut put into place. Payroll Taxes are not “REVENUE” per se as they are supposed to be going to Social Security, not fund the government operation, although everyone knows they do... So if personal income increases are not above corporate tax decreases, we are looking at a net negative in revenues that can be laid right at the tax law that was passed.

Like it or not, blaming the new tax law (at least in part) is NOT being dishonest.... Yes spending needs to be reigned in, no doubt, but when your revenues are net down, you can’t blame that on run away spending.


13 posted on 06/14/2019 11:19:33 AM PDT by HamiltonJay
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To: DoughtyOne

The previous line-item veto provision was struck down by SCOTUS. It won’t likely be tried again.


14 posted on 06/14/2019 11:23:13 AM PDT by Rastus
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To: HamiltonJay

I’ll wait for the production of some data...


15 posted on 06/14/2019 11:23:22 AM PDT by DoughtyOne (This space for rent...)
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To: Rastus

I would keep trying it until they stood down.

That’s what the Leftists do.


16 posted on 06/14/2019 11:24:36 AM PDT by DoughtyOne (This space for rent...)
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To: Rastus

The only alternative is to shut down the government. That hasn’t paid off yet.


17 posted on 06/14/2019 11:25:16 AM PDT by DoughtyOne (This space for rent...)
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To: DoughtyOne

Also need an audit. Just for the record: the Feral Governments books are, and have been, inauditable. A large number of billions goes to the Deep State, aka as slush funds, dispensed to who know for who knows purpose. Not on the books, except for the sum.

Plus, the Fed needs an audit. The gold held by the U.S. Government needs an audit, as it may have been pledged as collateral. In fact, may have been pledged as collateral more than once, then sold, then shipped out of the country. Without a total audit/inventory count, only the crooks know what they have stolen.


18 posted on 06/14/2019 11:25:41 AM PDT by bIlluminati (Defund the Left. Shrink the U.S. Federal government to 1897 levels.)
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To: DoughtyOne

And like I stated, here you go...

https://www.cnsnews.com/news/article/terence-p-jeffrey/corporate-income-tax-payments-were-down-507-january

You can tell as much by what an article leaves out, as what it tells you... corporate tax revenues are down over 20% in 2019....

Blaming the tax cuts (at least partially) for the deficit increase is not unjustified or fake news.


19 posted on 06/14/2019 11:50:01 AM PDT by HamiltonJay
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To: bIlluminati

Well, I’d be careful of doing an audit that might cause people to lose confidence in the dollar.

I understand why you want it done.


20 posted on 06/14/2019 11:56:04 AM PDT by DoughtyOne (This space for rent...)
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