PrintApril 12, 2007
Missing headlines (a continuing series)
"Budget deficit continues sharp decline." You probably haven't heard that the budget deficit is down sharply, and that federal tax revenues are soaring in the wake of the Bush tax cuts fostering increased economic activity (aka, prosperity).
The Bureau of Economic Analysis (BEA) updated the Current Receipts and Expenditures webpage detailing the current status of the US budget. Surprise, surprise, the 2006 annual budget deficit ended at $301,538,000,000 or for the big number people $301.5 billion (line 39). Why is this a surprise?
What have the Democrats been telling us about the Bush Tax Cuts? This 2006 annual budget deficit is approximately $155 billion less than the final tally of 2005.
This is occurring for some interesting reasons. The total receipts increased from 2005 to 2006 by approximately $383 billion (line 30). This means the Bush tax cuts are accelerating their effect and increasing revenue into the Treasury, not out of it as the Democrats have absurdly claimed. The previous yearly increase from 2004 to 2005 was $342 billion.
Total expenditures for 2006 increased by $229 billion (line 33). A hefty chunk of that increase, $86 billion, was for Government social benefits (line18). However, the previous 2004 to 2005 increase was more at $265 billion, in other words the pace of increase in expenditures is dropping. Look at line 18 for Government Social Benefits, and you will get a good idea why Bush was calling for Social Security reform.
For those interested in seeing the annual results of government operations go to the top of the BEA website, under the Series section click "Annual" There is a drop down menu for the years. Click the First year selection to pick a year. I suggest reviewing from 2000, the last year of the Clinton administration, to get the true perspective on increases both receipts and expenditures.
What all this information means is if we keep the current pace of increases in revenue and expenses, the budget will be balanced (a net positive) in 2009. We should anticipate a budget deficit of approximately $150 billion this year in 2007 and perhaps a miniscule deficit approaching zero in 2008 if the Democrats don't screw up the economy with their latest vote-buying scheme or environmental scare mongering with Global Warming or a tax increase.
Update:
Update:
“The surge is not the result of the 2001 and 2003 tax cuts but the AMT tax increases of 1990 and 1993 and the failure to index income exemptions to inflation,” said Grover Norquist, ATR president, before the House Ways and Means Committee on March 7, 2007. - an excellent article written by Julia A. Seymour at the Business & Media Institute
It looks like the Democrats have found a another way to spin by making the assertion that the Bush Tax cuts didn't do anything, it had to be a tax increase, it just had to be. To verify what amount the AMT does bring in I used google. I found a Congressional Budget Office (CBO) website discussing the AMT, http://www.cbo.gov/showdoc.cfm?index=4916&sequence=6 .
Another website by the CBO says AMT receipts in 2010 will total about $90 billion, roughly 7 percent of total individual income tax revenue. Nevertheless, the AMT is only partially successful in imposing tax liabilities on all high-income people: in 2001, nearly 1,100 tax filers with AGI above $500,000 paid federal income taxes only because of the AMT,(9) but almost 900 people in that income range paid no federal income tax at all despite the AMT.(10) Whether a particular taxpayer will have AMT liability depends primarily on income, number of dependents, and whether he or she lives in a locality with high property and state income taxes.
So how is collecting less than $90 billion (less than 7% of individual income tax receipts) annually from AMT by 2010 equal to the $383 billion increase in receipts in 2006???? Must be that new math of the liberal Democrats. What else could we expect from them, if the economy is growing it follows that tax receipts will be greater than the year before, is this really so hard to understand?
It looks like the Democrats have found a another way to spin by making the assertion that the Bush Tax cuts didn't do anything, it had to be a tax increase, it just had to be. To verify what amount the AMT does bring in I used google. I found a Congressional Budget Office (CBO) website discussing the AMT, http://www.cbo.gov/showdoc.cfm?index=4916&sequence=6 .
Another website by the CBO says AMT receipts in 2010 will total about $90 billion, roughly 7 percent of total individual income tax revenue. Nevertheless, the AMT is only partially successful in imposing tax liabilities on all high-income people: in 2001, nearly 1,100 tax filers with AGI above $500,000 paid federal income taxes only because of the AMT,(9) but almost 900 people in that income range paid no federal income tax at all despite the AMT.(10) Whether a particular taxpayer will have AMT liability depends primarily on income, number of dependents, and whether he or she lives in a locality with high property and state income taxes.
So how is collecting less than $90 billion (less than 7% of individual income tax receipts) annually from AMT by 2010 equal to the $383 billion increase in receipts in 2006???? Must be that new math of the liberal Democrats. What else could we expect from them, if the economy is growing it follows that tax receipts will be greater than the year before, is this really so hard to understand?
