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CNS: Feds Collect Record Taxes in First Month Under Tax Cut; Run Surplus in January
(CNSNews.com) - The federal government this January ran a surplus while collecting record total tax revenues for that month of the year, according to the Monthly Treasury Statement released today.
January was the first month under the new tax law that President Donald Trump signed in December.
During January, the Treasury collected approximately $361,038,000,000 in total tax revenues and spent a total of approximately $311,802,000,000 to run a surplus of approximately $49,236,000,000
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WNU Editor: This is a side story .... but one that needs to be pointed out. I have lost count over the years on how many times I have heard economists, politicians, and the media talk about why we need to increase taxes to cover budget deficits .... and then surprise, surprise .... find out later when they raised taxes that deficits instead rose, thereby repeating the cycle all over again. The narrative in the U.S. for the past few months has also been repeating this mantra .... that President Trump's tax cuts will produce higher deficits. But in the first month of tax cuts .... the U.S. government broke records in collecting tax revenue. How can that be? And is Arthur Laffer right?
7 comments:
I am no economist but every article dealing with this issue stated that the deficit would be massive but that would take place in some ten years and not immediately
" JCT's macroeconomic analysis -- also known as a dynamic score -- falls far short of Treasury Secretary Steven Mnuchin's oft-made claim that the proposed tax cuts will pay for themselves.
The analysis takes into account the interaction of several factors on the economy, including the bill's lower tax rates, its repeal of various tax breaks and its proposed international tax reforms with debt, labor force participation, employment and consumption.
The JCT said it expects the bill will increase the labor supply and investment in the first several years. But those effects are expected to diminish after 2025, when a number of provisions in the bill are slated to expire. "
Anon,
Your read is different than mine. Many were very clear that this would produce a budget deficit of over $1 trillion this year. But these numbers do not mesh with what they were predicting for January. So is their model right? Not for January.
Wait. .wnu..isn't that because the companies were bringing back oversea money that was taxed at lesser rate? And that's a one time thing...
Anon
Good observation.
But I do not think that overseas money has flowed in yet. These things do take time. Try and cancel a bank savings certificate before its time .... the penalties will kill you.
Well let's see. We'll find out if the tax break indeed - and not just for a month - worked in generating more revenue. It might be, but I'll wait with judgement until FY18-19 data is in and analysts have checked books.. definitely interesting to keep an eye on.
Also, keep in mind that deregulation is the other thing companies love and makes them more productive (not always/in every case but in general)..so that might have to do with it too
Deregulation certainly has helped. But the important point is still the same .... the "experts" missed it. So how can we trust their models.
A buzz saw - be it never so sharp - set at the wrong angle will always miscut the board.
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