Off-Topic: Revenue problem? I think not
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Name:
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MartiniMan
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Subject:
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Revenue problem? I think not
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Date:
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11/28/2012 9:11:13 AM
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Here's a quick question and answer for the "we need to raise taxes" crowd. How many years in the history of the United States have tax revenues exceeded tax year 2011? The answer is exactly 3 (2006-2008).
Every year the federal government collects taxes which equals its revenue (sort of like your salary or welfare or unemployment benefits for those unfortunate ones). Unlike our income, the federal government has seen a steady increase in tax revenues for almost every year since at least 1995 with the exception of 2002-2003 (post 9/11 recession) and 2008-2009 (post real estate balloon recession). Presumably the government would curtail spending during those lean years but alas, unlike revenue, spending has increased every single year since at least 1995 and for most of those years at a rate far exceeding spending (a bipartisan problem for sure). The only exceptions were 1998-2001 when the GOP-controlled Congress proposed a balanced budget and Clinton signed on in the mid-1990s so he could be reelected and they could fulfill their promise to voters. And yes, Clinton deserves the credit for agreeing with Congress's spending plan. Oh and by the way, the tax increases that Clinton put in place did not increase the rate of revenue growth for most of the years there was a surplus (the exception being 2000 where there was a bump in the rate of growth).
So if we say went back to 2008 spending levels as proposed by the GOP and maintained current tax rates as they are we would immediately reduce the deficits by $800 billion annually. And assuming that happened I am 100% convinced that the growth in the rate of revenue collection would accelerate at a rate equal to previous recoveries and would fairly soon catch up (assuming we get spending under control). What is amazing is the pathetic rise in revenues compared to other recoveries, especially when you compare it to the fastest growth in the rate of spending since WWII.
But if we repeat the mistakes of the past, especially during the Depression, we will be looking at $1 trillion deficits until we become insolvent. We need to get spending under control or we are doomed.
Another interesting factoid, the rate of revenue collection growth during the recovery from the 2002-2003 recession when tax rates were lowered for every worker that pays federal taxes was actually higher than any year during the Clinton administration. So the only logical conclusion is that lowering tax rates actually increases revenue to the treasury and increases the rate of revenue growth. Significant tax hikes are always followed by a recession. Now I am sure these very inconvenient facts and the logical conclusions will be ignored by the left because it is not about increasing revenue to the treasury, it is about punishing the productive and buying votes from the losers that have not achieved that level of success and resent those that have. Sound like anyone we know on the forum?
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