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Tuesday, February 13, 2018

Federal Tax Surplus

By Douglas V. Gibbs
Author, Speaker, Instructor, Radio Host

Since the approval of the new Tax Reform Law, of which began hitting last month, the economy simply based on confidence in what the market would be doing, has been in an upswing.  Now that the news of January is hitting the wire, it turns out that the federal government ran a surplus while collecting record total tax revenues for January.

During January, the Treasury collected approximately $361,038,000,000 in total tax revenues and spent a total of approximately $311,802,000,000 to run a surplus of approximately $49,236,000,000.

Despite the monthly surplus of $49,236,000,000, the federal government is still running a deficit of approximately $175,718,000,000 for fiscal year 2018. That is because the government entered the month with a deficit of approximately $224,955,000,000.

And it will only get better, because when more money remains in the economy as a result of reducing taxes, it expands the economy, increases production and consumerism, increases profit, and adds more taxpayers to the rolls through job creation . . . which increases revenue higher than it was when the percentage rates were higher.

The $361,038,000,000 in total taxes the Treasury collected this January was $11,747,870,000 more than the $349,290,130,000 that the Treasury collected in January of last year (in December 2017 dollars, adjusted using the Bureau of Labor Statistics inflation calculator).

The Treasury not only collected record taxes in the month of January itself, but has now collected record tax revenues for the first four months of a fiscal year (October through January).  Amazing what confidence in who resides in the White House can do to the numbers.

So far in fiscal 2018, the federal government has collected a record $1,130,550,000,000 in total taxes.

That said, it does not mean that the federal government should spend it.  85% of federal spending is unconstitutional.  Washington has a serious spending problem, and it is in our best interest to reduce that spending, and ultimately to begin making dents in our national debt.

The federal government is still running a cumulative deficit in this fiscal year of $175,718,000,000.

We'll see what happens.

I must remind everybody that in the 1890s, federal spending was about 3-4 percent of GDP, and that was before the 16th Amendment, which eventually gave us the IRS and income tax as it is today.  Federal spending in 2018, totaling federal, state, and local together, is at about 36.1 percent of GDP.

-- Political Pistachio Conservative News and Commentary

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