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An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.
On Tuesday, White House officials are expected to announce that the tax receipts will be about $250 billion above last year's levels and that the deficit will be about $100 billion less than what they projected six months ago. The rising tide in tax payments has been building for months, but the increased scale is surprising even seasoned budget analysts and making it easier for both the administration and Congress to finesse the big run-up in spending over the past year.
Tax revenues are climbing twice as fast as the administration predicted in February, so fast that the budget deficit could actually decline this year.
The main reason is a big spike in corporate tax receipts, which have nearly tripled since 2003, as well as what appears to be a big increase in individual taxes on stock market profits and executive bonuses.
An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.
RightatNYU said:
Bergslagstroll said:Well as a maybee ignorant european I would belive that the goal of the richest and most powerfull country would be to reduce there loans or atleast been able to have a balanced budget.
Well yes you got the Iraq war, but shouldn't the the most powerfull country in the world be able stop the violence with all the resources you already spend and going home soon. Also remember you had time both to plan and think the war over before you went in. Finally remember that with the econimical growth you got you should try to get a balanced budget even with the war.
But instead you still have a druged economy they you even in good econimical times spend more then you got.
RightatNYU said:
Goobieman said:What you dontunderstand that ~60% of our budget (over 1.4 TRILLION $) goes to Federal welfare entitlements.
If we didnt have such a huge welfare state, we wouldn't have these budgetary problems.
ShamMol said:Well Acorn, it is surprising. I think it has to do with corporations getting scared and actually paying their taxes after Enron, but that is just my working theory....
Goobieman said:Got anything to support that 'working theory'?
Enron was caught in 2001. This is 5 years later.
Yeah, I'm sure those horrible people in suits at the big bad corporations were just waiting to see how much time Lay got before they stopped stealing those millions of dollars from the poor workers.Iriemon said:But his trial and sentencing was just recently concluded, which would affect the corporate compliance folks. Sarbanes-Oxley probably has somehting to do with it as well.
Navy Pride said:Bottom line, cutting taxes puts more of their own money in peoples pockets, therefore creating more revenues for the government........What really need to happens is spending cuts........Hopefully that will happen now......
Gill said:Yeah, I'm sure those horrible people in suits at the big bad corporations were just waiting to see how much time Lay got before they stopped stealing those millions of dollars from the poor workers.
The corporate scandals took place during the 90's. Clinton's so called economic prosperity was a sham. Corporations like Enron, Worldcom and Tyco took advantage of the situation and reported excess profits so that stock and wealth were falsely inflated.
Iriemon said:The real sham, or shame, is the current economy, based on debt financing (total debt has increased almost 50% since Bush took over a Govt that had a balanced budget) and phony war spending.
Gill said:Yep, and 9/11 had nothing to do with it....
Of course, some economic indicators under Bush are better than under Clinton:
Iriemon said:Yep. And if we didn't spend so much on defense and phony wars and didn't cut taxes we wouldn't have these budgetary problems either.
Iriemon said:Bottom line, cutting taxes means that future tax payers have to pay the cost of our government. You get more dollars in your pocket now but future tax payers have to shoulder the burden of the costs of *our* government. That is immoral. But I wouldn't count on your Republican friends to be fiscally responsible, they haven't been for the last 25 years or more and have proven time and again they will pander to the electorate and pass the buck to stay in power.
I haven't heard any of them calling for the $500 billion in spending cuts it would take to balance the budget, have you?
Navy Pride said:Yeah we should just disarm and let the chips fall where they may,,Not....:roll:
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