Paul L. Caron
Dean


Sunday, August 19, 2018

WSJ: Tax Revenues Are Up 1%, Despite Trump Tax Cuts

Wall Street Journal editorial, Tax Revenues Are Higher:

Perhaps you’ve read that the federal budget deficit is rising again, and that’s true. But what you probably haven’t heard is that the main reason is spending, not falling revenue from tax cuts.

The Congressional Budget Office released its budget summary for July this week, and the deficit for the first 10 months of fiscal 2018 reached $682 billion, up $116 billion from a year earlier. Federal spending increased by $143 billion for all the usual reasons—especially Medicare, Medicaid and Social Security.

But revenues were higher as well—up $26 billion. Corporate income taxes were down substantially as expected in the wake of the tax reform that cut the corporate rate and added 100% expensing. But individual income taxes increased by $104 billion, or 7.9%, despite the cut in individual tax rates.

CBO

How could that be? CBO says one reason is that withholding from paychecks increased by $32 billion, which “largely reflects increases in wages and salaries.” In other words, a faster-growing economy employed more people who made more money.

https://taxprof.typepad.com/taxprof_blog/2018/08/wsj-personal-income-tax-revenues-are-up-79-despite-trump-tax-cuts.html

Tax | Permalink

Comments

This article is so unbelievably dumb. Revenue would be higher if not for the tax cuts. The economy always grows over time, so revenue and spending both increase.

Higher tax rates, more revenue, until you get up in the vicinity of 90% tax rates.

Posted by: Dumb | Aug 25, 2018 12:07:53 PM