Surprising Jump in Tax Revenues Is Curbing Deficit

[RightinNYC]

From today's NYTimes

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.

But then, wasn't Bush the one who kept on cutting corporate taxes?

 

[Spartacus FPV]

Thats good news, maybe he'll curb his spending too...

 

[Paul]

Just another reason why tax cuts are good...

 

[Goobieman]

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.

So... the wealthy are paying MORE after the tax cut...?

This should make the liberals happy - and yet I doubt it will.

 

[Navy Pride]

Tax cuts work, no matter what tax and spend Liberals say......

 

[RightinNYC]

Thats good news, maybe he'll curb his spending too...

hear hear...

 

[aps]

From today's NYTimes



But then, wasn't Bush the one who kept on cutting corporate taxes?

Shall I mention the fact that this was on the FRONT PAGE of the New York Times?

 

[Bergslagstroll]

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.

 

[Little-Acorn]

The funniest part of the NYT headline was the word "surprising".

 

[ShamMol]

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]

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.

What you dont understand is 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.

 

[Iriemon]

From today's NYTimes

But then, wasn't Bush the one who kept on cutting corporate taxes?

The corporate tax cuts were not large (~$140 billion over 10 years) and were supposedly offset by closing tax loopholes and tax increases:

The Joint Tax Committee said the overall bill would not increase the deficit because the $136 billion in tax cuts over the next decade were balanced by $136 billion in tax increases.

http://www.msnbc.msn.com/id/6307293/

The 69 to 17 vote, taken in a rare holiday session, belied the acrimony underlying the measure, which includes $143 billion in tax breaks over 10 years, offset by loophole closures and other revenue raisers.

http://www.washingtonpost.com/wp-dyn/articles/A25407-2004Oct11.html

It is great that revenues are picking up after 5 abysmal years, but something doesn't jive: The US debt has increased almost $500 billion in the first 9 months of FY2006:

09/30/2005 $7,932,709,661,723.50
06/30/2006 $8,420,041,947,892.19

It is on pace for breaking the record of $598 billion in FY2004.

I think the way they are claiming the "deficit" will be lower, even though borrowing is at an all time record pace, is by using the funny accounting we discussed in the other thread, where they count SS revenues (which were not cut but have accounted for a big part of increased overall revenues) as general revenues to make the "deficit" look like its doing better when it is not.

 

[Iriemon]

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.

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.

 

[Goobieman]

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....

Got anything to support that 'working theory'?
Enron was caught in 2001. This is 5 years later.

 

[Iriemon]

Got anything to support that 'working theory'?
Enron was caught in 2001. This is 5 years later.

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]

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]

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.

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]

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......

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?

 

[Iriemon]

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.

Maybe not, but I bet the are being a lot more careful to cross their "t"'s and dot their "i"'s on their tax returns.

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.

There are always cycles of corporate scandals, doesn't change the great period of economic growth during Clinton's term. Even including 01-02 the eocnomy grew at a real 3.3% rate -- better than during Reagan/Bush.

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]

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.

Yep, and 9/11 had nothing to do with it....

Of course, some economic indicators under Bush are better than under Clinton:

 

[Iriemon]

Yep, and 9/11 had nothing to do with it....

True. Bush's "war" on terror has something to do with it.

Of course, some economic indicators under Bush are better than under Clinton:

wowsie.

 

[Blitz]

I don't trust those numbers for some reason. Unemployement should be about 2.3 percentage points higher than what is being shown. It's called cherry picking and leaving out details. This administration is very very good at it. Bring back the workers market dam it. This investors market is not what the American people want and they know it. The investors can't hold up the entire U.S. for ever. Eventually they will need more people and buying them cheap won't help. If they refuse and act like the sell-outs they are, then bring on another major cilvil war and we'll deal with it that way since discussions do nothing.:blastem:

 

[Navy Pride]

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.

Yeah we should just disarm and let the chips fall where they may,,Not....:roll:

 

[Navy Pride]

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?

Read the article in the NYT, thanks to tax cuts and increased revenue 100 billion was sliced off the deficit...........You just don't want to give the Bush Administration credit for anything, its as simple as that.........

 

[Iriemon]

Yeah we should just disarm and let the chips fall where they may,,Not....:roll:

Nah. We should just eliminate income, dividend and cap gains taxes (but not SS taxes, the working folks pay that after all) and borrow everything. Stick the next generation. That would be the fulfillment of the Republican dream.