Tax collections hit record level for July

[LASERMOVIES]

http://www.sacbee.com/24hour/politics/story/2624884p-11099368c.html

Tax collections hit record level for July
By MARTIN CRUTSINGER, AP Economics Writer
Published 12:52 pm PDT Wednesday, August 10, 2005
WASHINGTON (AP) - A record amount of tax revenue flowed into federal coffers in July, helping to keep the government on track to significantly lower the budget deficit this year.

The Treasury Department reported Wednesday that revenue collections jumped 5.7 percent last month from a year ago, pushing total receipts to $142.09 billion, the largest amount ever collected by the federal government in the month of July.

The Bush administration last month significantly lowered its estimate for this year's budget deficit - to $332.65 billion, down 22 percent from its February estimate that the deficit this year would total $427 billion.

The reason for the sharp improvement has been a flood of additional revenues this year as an improving economy has pumped up personal and corporate income collections.

Revenues through July are up are 13.8 percent over the same 10 months of the 2004 budget year, totaling $1.746 trillion. That outpaced the 6.1 percent increase in government spending which totaled $1.534 trillion for the same period.

The forecasts of private economists are generally in line with the administration's expectations for a significant improvement in the deficit for the current budget year, which ends on Sept. 30.

For July, government spending totaled $194.88 billion. The deficit for the month totaled $52.79 billion, down 23.7 percent from an imbalance of $69.2 billion in July 2004.

The deficit for the past 10 months totals $302.59 billion, down 23.6 percent from the $396.32 billion in red ink run up during the same period in 2004.

In 2001, the year Bush took office, the government recorded a surplus of $127 billion. It was the fourth consecutive annual surplus, a string that had not been matched since 1930.

However, the bursting of the stock market bubble and the 2001 recession cut into tax collections while the global war on terrorism that was launched after the Sept. 11, 2001 terrorist attacks pushed spending higher.

Additionally, Bush got Congress to approve major tax cuts in 2001 and 2003 which reduced revenue collections in an effort to jump-start the stalled economy. Last year's deficit set a record in dollar terms of $412.8 billion.

Bush, meeting with his economic team on Tuesday at his Crawford, Texas, ranch, attributed the improvement in this year's deficit performance to spending restraint and his tax cuts, which he said "got our economy going."

[grundle]

This proves that the budget deficit is caused by too much government spending, not a lack of tax revenues.

It also proves that conservatives and libertarians were correct when they predicted that cutting marginal tax rates would create incentives that would lead to more economic activity and higher tax revenues.

[DVD Polizei]

Yeah, FOX News is reporting this as well. Almost word for word.

Tax accountants are laughing at this article. Let me give you the skinny.

1) Tax revenues are on one line

2) Tax deductions are on another

3) NET tax revenue

In 2001, the year Bush took office, the government recorded a surplus of $127 billion. It was the fourth consecutive annual surplus, a string that had not been matched since 1930.

And when we have a quote like that in the article, they might as well have added that pink elephants are lining up across the Mexican border, hand-in-hand, preventing evil terrorists from getting in.

This proves that the budget deficit is caused by too much government spending, not a lack of tax revenues.

It also proves that conservatives and libertarians were correct when they predicted that cutting marginal tax rates would create incentives that would lead to more economic activity and higher tax revenues.

That last paragraph is a little more complicated than you make it sound.

[X]

:confused:

Tax revenues are taxes collected, some will be returned as refunds, and some taxes are due that haven't been paid. The system hasn't changed, withholding rates haven't increased, so the numbers are able to be fairly compared with previous years.

[DVD Polizei]

Forgot to add that corporate profits are at an all-time high, not due to more jobs, but DECREASING or ELIMINATING those jobs entirely, to create more profits. Ever heard of outsourcing? Anyone check the gas prices over the last year and how much these gas companies are making?

More profits = More Tax Revenue.

What I would like to see, is just WHO has contributed to the higher tax revenue. Is it due to more people making more money, or more corporations making more money. Big difference.

[X]

Here you are...

http://fms.treas.gov/mts/index.html

[DVD Polizei]

Thanks for link.

I don't doubt there is a paper increase of ~5.7%, but it's a stretch to correlate it with a "better" economy. I guess it's a better economy for large business. Maybe this doc will show where the increase in outlays came from.

[Mordred]

Appears that Individual Income Receipts are up 100million YTD over the same period last year (656m to 756m) and Corporate receipts are up 60m YTD from the same period last year (145m to 205m). Good to see. Would also be nice if the government showed a modicum of restraint as well.