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Trump tax plan – record tax revenues


When the nonpartisan Joint Committee on Taxation was asked to score the impact of the proposed Trump tax plan in late 2017, here was their conclusion (QUOTE):
"The staff of the Joint Committee on Taxation (JCT) estimates that enacting the bill would reduce revenues by about $1,438 billion over the 2018-2027 period, and decrease outlays by $2 billion over the same period, leading to an increase in the deficit of $1,437 billion over the next 10 years" 
Now keep in mind that the JCT was required to use what is known as a "Static Forecasting Model" that does not allow them to include any potential tax revenue benefit resulting from any economic stimulus that might arise from those cuts in TAX RATES.
So now that we are five years into the Trump tax plan (that took effect on January 1, 2018), what effect did it actually have on TAX REVENUES?
Suppose you take the ten year $1.438 Trillion DECLINE in expected tax revenues over those ten years. In that case, that works out to an average decline in expected tax revenue of approximately $143.8 Billion per year.
And what were those expected tax revenues?
At the time the analysis & projection was done, the US had just completed FY 2017 which ended September 30, 2017. Tax revenues for that Fiscal year came in at $3.315 Trillion which reflected a tax revenue growth rate of 1.47% over the previous fiscal year.
Using the static forecasting model and applying that 1.47% rate of growth to the FY 2017 base year and compounding that growth rate annually, Tax revenues for FY 2022 would have come in at $3.566 Trillion and a five year Tax revenue total of $17.320 Trillion without any impact or reduction associated with the proposed Trump tax plan (see attached spreadsheet). If you were to include the predicted loss of $143.8 billion per year in tax revenues associated with the Trump tax plan, that predicted 5 year revenue total would have fallen by $719 Billion to $16.601 Trillion.
And what actually happened?
FY 2018 was a blend of  3 months of the old Obama era tax plan (October-December 2017) and 9 months of the new Trump tax plan. Tax revenues for that Fiscal year did come in $35 billion lower than the continuation of the Obama tax plan would have yielded.
In FY 2019 (a full 12 months of the new Trump tax plan), tax revenues came in $39 Billion AHEAD of what the static forecasting model would have predicted for the Obama era tax plan ($3.462 Trillion actual vs. $3.413 Trillion Obama plan prediction).
FY 2020 was the pandemic year and as expected, tax revenues fell but only by $42 Billion from prior year and only $43 Billion behind the Obama tax plan model (not adjusted for any negative Covid impact).
Then we get to FY 2021.   Tax revenues SOAR by $626 Billion to a new all time record high of $4.046 Trillion, an 18.3% increase over FY 2020 and $532 Billion HIGHER than predicted if the old Obama tax plan had still been in place.
And then we get to FY 2022 which ended on September 30, 2022. Tax revenues again SOAR by another $850 Billion to another new all time record high of $4.896 Trillion bringing ten Five Fiscal year total tax revenues under the Trump tax plan to $19.153 Trillion, $1.833 HIGHER than the 5 year predicted 5 year tax revenue total of $17,320 Trillion that would have been expected had the Obama  era plan been left in place (and with ZERO reduction for any Covid impact) .
And what about the Corporate tax revenue component of  that total tax revenue figure? Did the 40% (14 point) reduction in the corporate tax rate from 35% down to 21% crash corporate tax revenues?   Let's see what the Treasury data says: 
For FY 2017, Corporate tax revenues were $297 Billion. For FY 2022, that figure had grown by 43% to $425 Billion. Not bad for a 40% reduction in Corporate tax RATES! 
So is the Trump tax plan responsible for increasing the National Debt by more than $6 Trillion over the past 5 years? No. In fact, without the increase in tax revenues attributable to the Trump tax plan, that increase in the national debt would have been another $1.8 Trillion HIGHER!
Another liberal myth crushed by facts and data.

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