Tax Revenue Hits Record High; Dems Hardest Hit
Good employment numbers coupled with the Republican tax cut proves to grow tax revenue.
“This is Armageddon,” Rep. Nancy Pelosi (D-CA) infamously insisted among her dire warnings against the Republican tax cut legislation. (She also dismissed tax relief as “crumbs,” so figure that contradiction out.) Pelosi also predicted that it would be “very hard … to come back from this,” only serving to “take us further, more deeply into debt.” In fact, she said, the only way out would be to “raise taxes.” Well, as the months go by and the positive economic numbers continue to pour in, Pelosi and her fellow Democrats — not one of whom voted for the tax cuts — are being proved wrong and then some.
The Congressional Budget Office reports that in April the U.S. posted its largest monthly budget surplus on record. As Bloomberg reports, “Receipts in April totaled $510 billion, about 12 percent more than the same period last year, while outlays increased by 8.4 percent to $296 billion, the Treasury Department said Thursday in its monthly budget statement. The monthly surplus was $214 billion, the highest in records dating to 1968.”
And why all this increase in government revenue after the tax cuts? Simple economics. While it’s true that much of the revenue was derived from people paying their 2017 tax bills, there are also simply more people working now, which means more tax revenue for the government. Combine President Donald Trump’s aggressive deregulation with the Republican tax cut and voila! — a booming economy.
However, the bad news is that despite all this record tax revenue, the federal government is still running an overall budget deficit of $385 billion. As we have regularly noted, the government has a serious spending problem, to which the only real solution is actually cutting spending, not simply limiting the amount of annual budget increases and passing it off as a “cut.”
Back to Pelosi and the Democrats, they may want to rethink their plans to campaign against the GOP’s tax cut. Investor’s Business Daily notes that the latest IBD/TIPP Poll’s Quality of Life Index “reached a 14-year high in April. And since the tax cuts went into effect, the IBD/TIPP Economic Optimism Index has averaged 54.7 (anything above 50 is optimistic). That’s well above the 17-year average of 49.4. In President Obama’s last year in office, it averaged just 48.6.” With news like this, Democrats’ “blue wave” come November may prove to be little more than a ripple.
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