Posted on 01/21/2023 9:38:10 AM PST by SoConPubbie
Tax cuts signed into law in 2017 by then-President Donald Trump have raised revenues for the federal government over the last five years, despite concerns among Democrats and other critics that the cuts would be a fiscal nightmare only benefiting the rich.
The government collected a record $4.9 trillion in revenue last year, according to the latest report from the Congressional Budget Office, a nonpartisan federal agency. That's nearly $500 billion higher than what the CBO had projected.
Receipts from corporate income taxes, meanwhile, were $425 billion, exceeding CBO's projection by 25%, while receipts from individual income taxes were $2.6 trillion, exceeding CBO's projection by 11%.
Federal revenues are now up about $1.5 trillion, or roughly 40%, since the Trump tax cuts went into effect at the beginning of 2018. By comparison, the cuts were initially estimated to cost the government $1 trillion, according to the Joint Committee on Taxation.
"We have higher tax revenue right now than we've ever had in the history of the country," Rep. Austin Scott (R-Ga.) told the John Solomon Reports podcast. "Think about that: Everything we've been through — COVID, inflation, all of the challenges of the last 36 months that our country has had — we have higher tax revenues than we have ever had in the history of the country."
Trump signed the Republican-backed Tax Cuts and Jobs Act into law in December 2017. The legislation simplified tax filing for many families and lowered the tax rates paid by most filers. It also cut business taxes, including lowering the corporate income tax rate from 35% to 21%.
Democrats and experts from left-leaning organizations blasted the tax cuts as a ploy to benefit the rich exclusively in a move that would cause deficits to soar.
"Last time Republicans held the majority, they enacted a $2 trillion tax scam that funneled massive windfalls to the biggest corporations and wealthiest families — which increased the deficit because the GOP did not provide offsets," Rep. Nancy Pelosi (D-Calif.) said Monday in a press release, echoing a common talking point of hers.
President Biden has similarly said "all" of the tax cut benefits "went to folks at the top and corporations," a claim deemed "false" by the Washington Post's fact-checker. Biden's White House has also claimed the Trump tax cuts would add trillions to deficits over the next decade due to less revenue.
However, beyond raising revenues, the Tax Cuts and Jobs Act lowered taxes for all income groups, particularly the middle class, according to studies and government data.
Americans with adjusted gross income (AGI) between $50,000 and $74,999 saw a 15.2% reduction in average tax liabilities between 2017 and 2019, the year of the agency's most recent available data, according to an analysis by Americans for Tax Reform. During that same period, Americans with AGI of between $75,000 and $99,999 saw a 15.6% reduction in average federal tax liability.
In 2018, middle- and working-class Americans received tax cuts of between 11% and 88%, at least double that of wealthier taxpayers, according to an analysis of IRS income tax data by the Heartland Institute. Those earning between $500,000 and $1 million received single-digit cuts, and those reporting an AGI of between $5 million and $10 million paid just 3.5% less in taxes.
"It is the working class who have made the biggest gains under the Tax Cuts and Jobs Act," Rep. Jason Smith (R-Mo.), the new chair of the powerful House Ways and Means Committee, said in December to mark the five-year anniversary of the Trump tax cuts. "Not only did working families get to keep more of their paycheck, but their paychecks grew the fastest compared to every other income group."
Before the economic devastation caused by the COVID-19 pandemic, household incomes were rising at historic rates in the aftermath of the tax cuts.
Real median household incomes grew by more than $5,000 in 2018 and 2019 alone. By contrast, according to the Heritage Foundation, real median household income grew by a total of $7,600, or about $250 per year, in the 30 years prior to 2017.
Meanwhile, business investment increases spiked by the end of 2019 by 9.4% compared to the pre-tax cut trend, according to Tyler Goodspeed and Kevin Hassett, who served as acting chairman and chairman, respectively, of the Council of Economic Advisers in the Trump administration. For corporations, real investment was up by as much as 14.2% That finding echoes a 2021 report from the Heritage Foundation outlining major growth in wages and investment following the tax cuts.
Scott chided Democrats for arguing higher tax rates mean higher government revenue, noting Trump's individual tax cuts are set to expire in 2025 and warning there will be reduced federal revenue if that's allowed to happen. Republicans have called for extending the provisions but will likely face stiff resistance from Democrats.
"One of our real challenges is getting those tax rates that have spurred this economic growth extended," said Scott. "Again, we've got higher tax revenue than we've ever had in the history of the country. We don't have a tax rate problem; we have a spending problem."
The CBO estimated on Tuesday that the federal deficit increased to $418 billion in the first quarter of fiscal 2023 — $41 billion more than the first quarter of the previous fiscal year, when COVID-19 was still a prominent issue in daily life for many Americans.
While the CBO was substantially off with its revenue estimates for last year, the agency may hit closer to the mark this year.
"The report tells us less about the impact of tax changes dating to 2018, and more about CBO underestimating the speed of the recovery from the 2020 downturn and the revenue consequences of undoing the emergency fiscal response," said Douglas Holtz-Eakin, president of the American Action Forum. "With those two anomalies in the rearview mirror, CBO will likely be much closer to the mark in fiscal 2023."
Understanding how money is made and correct use of the Laffer curve is not in the preview of progressives. They know how to manage and spend other peoples money badly.
Spending is the problem, not income. The national debt went up 40% ($20T to $28T) in Trump’s four years.
The progressives think of us as people with bad ideas we know they are bad people with ideas.
JFK did the same thing.
There is a rabbit living under my hay stack that is smarter than PELOSI.
No, DeSantis is running a surplus in Florida. NO DEBT.
He may have raised his budget, but he is living within his means, unlike Trump, who averaged living $2 Trillion OVER his means for 4 years.
"Federal revenue continues to soar with Trump tax cuts, CBO report shows [??? emphasis added]"
FR: Never Accept the Premise of Your Opponent’s Argument
What the CBO report probably does not mention is that unconstitutional federal taxing and spending is soaring even higher than Trump tax cut revenues.
From related threads...
The country needs to go back to the original method of paying to run the federal government which was having rich people uniquely support it.
More specifically, consider that Thomas Jefferson had noted that the rich alone paid taxes (tariffs) to run the federal government.
“The rich alone use imported articles, and on these alone the whole taxes of the General Government are levied [emphasis added]. … Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.” —Thomas Jefferson to Thaddeus Kosciusko, 1811.
Rich taxpayers would appropriately have the job of policing the feds to stop unconstitutional federal spending.
"Congress is not empowered to tax for those purposes which are within the exclusive province of the States." —Justice John Marshall, Gibbons v. Ogden, 1824.
“If the tax be not proposed for the common defence, or general welfare, but for other objects, wholly extraneous, (as for instance, for propagating Mahometanism among the Turks, or giving aids and subsidies to a foreign nation, to build palaces for its kings, or erect monuments to its heroes,) it would be wholly indefensible upon constitutional principles [emphases added].” — Justice Joseph Story, Commentaries on the Constitution 2 (1833).
Pelosi: "We have to pass the bill so that you can find out what is in it." (non-FR; 6 sec.)
“Cherish, therefore, the spirit of our people, and keep alive their attention. If once they become inattentive to the public affairs, you and I, and Congress and Assemblies, judges and governors, shall all become wolves [emphasis added]. It seems to be the law of our general nature.” - Thomas Jefferson (Letter to Edward Carrington January 16, 1787)
And speaking of constitutionally indefensible federal spending, the MAGA-controlled House desperately needs to introduce a resolution for Congress to propose an amendment to the Constitution to the states that is limited strictly to repealing the 16th (direct taxes) and 17th Amendments (popular voting for federal senators) (16&17A), little or ideally no discussion required for such an amendment imo.
Repealing 16&17A would effectively "secede" ALL the states from the unconstitutionally big federal government imo.
Although such a resolution is doomed with gridlocked Congress (where are the states?), what patriots initially get out of a repeal 16&17A resolution is seeing more masks fall off remaining RINO lawmakers who vote against resolution that patriots can primary in 2024.
In the meanwhile, "street fighter" Trump 47 not only needs to finish draining the swamp, but MAGA lawmakers need to support Trump in requiring CBO to publicly report in 24 hours when an appropriations bill contains spending that is not reasonably justifiable under Congress's constitutional Article I, Section 8-limited powers.
“Trump; tax cuts” were not Trump’s tax cuts. As the Constitution requires they were written by the 2017-18 Republican House of Representatives. They took hold just in time for their effects to be wiped out by the deep state virus.
Tax cuts work every time they are tried, regardless of whether or not spending gets reduced.
Tax cuts work because they incentivize earning. Why earn money if your government is going to confiscate it?
Higher personal earnings mean more federal revenue. Voila. You don’t have to cut spending.
Well duh
DJT never started draining the swamp.
His biggest mistake was leaving obama holdovers day one, completr opposite of draining it.
Should read:
"...despite LIES spread by Democrats and other critics..."
Why work if your government is going to pay you to sit at home and watch TV?
and we’re now 32 TRILLION in debt and climbing.
Spending is the problem,...Don't you really mean Trump is the problem. Congress controls the purse strings, not the President.
One example of "his" spending was for improving the depleted military. Depleted not only by Obama but also by Bush.
BTW where were you squealing about spending before Trump was elected?
Trump didn’t have to sign those Omnibus bills. But he did.
This site used to be full of people who cared about a balanced budget, and the soaring debt. Now only a few, since we have a big spender on our side now, apparently.
Nobody cares about a balanced budget. Oh sure they always say “cut spending”, until it comes time to cut their pet program.
GOP lawmakers propose balanced budget amendment as US nears debt ceiling
“You can’t have a balanced budget unless you start cutting,” said Rep. Ralph Norman (R-S.C.)
Rep. Mark Green (R-Tenn.), a member of the conservative House Freedom Caucus, re-introduced a constitutional amendment on Tuesday that would require Congress to balance the federal budget.
The Republican Study Committee (RSC), a conservative GOP House caucus, called Wednesday for cutting $14 trillion in spending over a decade to balance the budget and produce a surplus.
https://rsc-hern.house.gov/reclaimingourfiscalfuture
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