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America has a revenue problem. Blame George W. Bush and Donald Trump.
Even though the national debt is rising, spending can’t be blamed.
Oct. 27, 2023, 12:24 PM CDT
By Bobby Kogan
When jobs are plentiful and business profits soar, that means good news for federal tax revenues. At least, that’s how it’s supposed to work.
For 15 years after the Tax Reform Act of 1986 went into effect, that’s exactly what happened: Changes in the U.S. unemployment rate were a strong predictor of changes in our federal tax revenues as a percent of the GDP; a drop in the unemployment rate caused revenues as a percent of GDP to increase. But since the beginning of the 21st century, a series of tax cuts under presidents George W. Bush and Donald Trump have shattered the link between tax revenues and employment. Revenues as a percent of GDP dropped significantly, and now they no longer grow much when the economy strengthens.
After news that the federal deficit grew despite a strong economy, amid rising interest rates, there are renewed fears about the nation’s fiscal outlook. With these fears typically come calls to reduce spending. But the U.S. doesn’t have a spending problem; it has a revenue problem caused by tax cuts.
(More at link)
https://www.msnbc.com/opinion/msnbc-opinion/us-economy-trump-bush-tax-cuts-deficit-rcna122322
Oct. 27, 2023, 12:24 PM CDT
By Bobby Kogan
When jobs are plentiful and business profits soar, that means good news for federal tax revenues. At least, that’s how it’s supposed to work.
For 15 years after the Tax Reform Act of 1986 went into effect, that’s exactly what happened: Changes in the U.S. unemployment rate were a strong predictor of changes in our federal tax revenues as a percent of the GDP; a drop in the unemployment rate caused revenues as a percent of GDP to increase. But since the beginning of the 21st century, a series of tax cuts under presidents George W. Bush and Donald Trump have shattered the link between tax revenues and employment. Revenues as a percent of GDP dropped significantly, and now they no longer grow much when the economy strengthens.
After news that the federal deficit grew despite a strong economy, amid rising interest rates, there are renewed fears about the nation’s fiscal outlook. With these fears typically come calls to reduce spending. But the U.S. doesn’t have a spending problem; it has a revenue problem caused by tax cuts.
(More at link)
https://www.msnbc.com/opinion/msnbc-opinion/us-economy-trump-bush-tax-cuts-deficit-rcna122322
4 replies
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= new reply since forum marked as read
It started under Reagan and continues apace. Slashing tax rates at the top, while doing basically nothing to rein in spending. Redardless of what they say, repubs never really cut spending, they just redirect it to Defense or to giveaways to big corporations. Sure, they're willing to cut spending on "social programs" but cry like banshees if one of their sacred cows goes under the axe.
We need to reinstate taxes on the very wealthy and eliminate most of the bullshit exemptions they get to avoid them. Small percentage increases on the wealthy generate billions in revenue. 
That made a splash years ago.
