Posted on 09/11/2023 3:25:25 PM PDT by Tolerance Sucks Rocks
Just because the government raises taxes, doesn’t necessarily mean it will raise more revenues. The Biden administration is discovering that the hard way.
In August 2022, President Joe Biden signed the misnamed Inflation Reduction Act into law, which included a new tax on companies’ financial statement income, new IRS funding to increase audits, an excise tax on stock buybacks, and more taxes on natural gas, oil, and coal. To top it off, certain Trump administration business tax cuts simultaneously have been phasing out.
On paper, that adds up to more than $60 billion in tax hikes in 2023.
Yet, as of July 31, tax revenues are down almost $400 billion from the same time last year, representing a 13% drop in tax receipts—even larger after accounting for inflation.
It’s unusual for tax revenues to drop from one year to the next, as it’s happened only eight times since 1960. And only once in that 63-year period—from 2008 to 2009—did revenues fall by more than 7%.
It’s too early to fully account for why tax revenues are down in 2023. However, there are some factors that are clearly at work, even if it’s unclear how much of the drop in tax receipts each factor explains.
The following are five such factors.
1) Slow Economic Growth Economic growth has cooled substantially over the past year and a half, leading to stagnant real incomes, which in turn have diminished income-tax and payroll-tax receipts.
Reduced capital gains taxes may especially be dragging down revenue collection. Stocks fell in 2022, and while most market indices recovered in 2023, dividend payouts and stock buybacks have dropped. Existing home sales have also tanked in 2023.
(Excerpt) Read more at dailysignal.com ...
I was under the assumption (and I think I saw an article) that tax revenue had never been higher, at least in recent years, given inflation.
And yet the deficit continued to increase at an even more rapid pace in some years.
Good point. Millions of Baby Boomers are no longer drawing a paycheck. That's costing the Treasury money.
How about the basic reality that 1,000’s of tax paying and working Californians have moved to other states.
In our culdesac, we have had 2 good income earners leave California in this year.
Also, a husband and his wife died last year. They paid taxes on their SS, IRAs and retirement checks. Now the state and feds get 0 taxes on those gone forever monthly checks.
BTTT on Laffer
1) Biden
2) Biden
3) Biden
4) Biden
5) Biden
Taxing all the Blockbuster and other video rental stores as well as electronics places like Radio Shack didn’t bring in as much tax revenue this year as they expected. Neither did the 5 cents per copy tax on newspapers delivered to homes and offices.
Go figure.
I have no ‘earned, taxable income’ and I get along just fine. :)
We’re not spending JACK on anything beyond the basics. No home improvements, no vacations, no dining out, combining errands into ONE day a week to save on gas.
Buying nothing besides milk, eggs, butter and toilet paper. OK, I DID have to buy some canning jars this season, but they pay for themselves in the long run. Using up whatever is in the freezer for meat. Hunting and fishing in season. Growing my own steer for this winter into spring and buying half a hog for CASH from the neighbor this October.
And there are MILLIONS more Rural Folk just like me in my age bracket and income level. We all had an ‘informal meeting’ DECADES ago and whenever a Socialist Democrat is in The White House, we slash expenditures and hunker down until it passes. It’s like a kidney stone but still, it passes. ;)
Screw You Mother Government and the ELECTION you STOLE to ride in on!
I agree with you. Politicians and media people either do not know the difference between the vague “taxes”, tax revenue, and tax rates or they are trying to fool the public.
If there is one math topic that American children should be learning before algebra, it is all about percentages, including the difference between tax revenue and tax rates. The difference between gross income and net income for a business would be helpful as well.
It is called the Laffyer Curve. If you impose zero taxes you have no tax revenue. If you impose 100% taxation people refuse to work unless under a totalitarian dictatorship. You work and they government gives you minimal sustenance as in North Korea. It is all about power and control.
Oddly, the Laffer curve is about 45% of your income. This is not just income tax but all taxes i.e. income tax, sales tax, property tax, excise tax, taxes on fuel, food, etc. New York, California, New Jersey, Massachusetts, etc. have gone past this and actually have reduced revenue. The red states are on the left of the curve. The blue states are on the right of the curve and thus have reduced revenue.
I am not an advocate of maximum revenue for government. I like to be much left on the laffer curve. To achieve this one must cut social spending on unneeded projects that are political. This also includes military as it has many programs that need deletion without harm to our safety.
See my post 32. You posted as I was posting.
Exactly
Gov. Greg Abbott signs $18 billion tax cut package for Texas property owners
https://www.texastribune.org/2023/07/24/texas-abbott-property-tax-cut/
At a time when the state has some of the nation’s highest property (rates) taxes, the initiative was a cornerstone of his 2022 reelection campaign.
July 24, 2023
I saw Lt. Gov. Dan Patric describe the scale of this tax reduction yesterday on the Senate floor. It is Huge.
Texas has no income tax, has had high property tax rates, BUT the cost of home in Texas has been very low compared to most other states. Especially those away from large cities.
There you go. Point #7 well taken and duly noted.
From the bottom up and top out everyone is suffering under Biden.
Blood, stone. There, is that so hard?
Lol, I’m the exception. I’m turning 70 next year, and still working. Beats getting hit by honey do’s on a routine basis.
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