On Tuesday, White House officials are expected to announce that the tax receipts will be about $250 billion above last year's levels and that the deficit will be about $100 billion less than what they projected six months ago. The rising tide in tax payments has been building for months, but the increased scale is surprising even seasoned budget analysts and making it easier for both the administration and Congress to finesse the big run-up in spending over the past year.
Tax revenues are climbing twice as fast as the administration predicted in February, so fast that the budget deficit could actually decline this year.
The main reason is a big spike in corporate tax receipts, which have nearly tripled since 2003, as well as what appears to be a big increase in individual taxes on stock market profits and executive bonuses.
On Friday, the Congressional Budget Office reported that corporate tax receipts for the nine months ending in June hit $250 billion — nearly 26 percent higher than the same time last year — and that overall revenues were $206 billion higher than at this point in 2005.
Congressional analysts say the surprise windfall could shrink the deficit this year to $300 billion, from $318 billion in 2005 and an all-time high of $412 billion in 2004.
Republicans are already arguing that the revenue jump proves that their tax cuts, especially the 2003 tax cut on stock dividends, would spur the economy and ultimately increase revenues.
"The tax relief we delivered has helped unleash the entrepreneurial spirit of America and kept our economy the envy of the world," President Bush said in his weekly radio address on Saturday.
Democrats and many independent budget analysts note that overall revenues have barely climbed back to the levels reached in 2000, and that the government has borrowed trillions of dollars against Social Security surpluses just as the first of the nation's baby boomers are nearing retirement....
The surge could also evaporate as quickly as it appeared. Over the past decade, tax revenues have become much more volatile, alternately soaring and plunging in the wake of swings in the stock market and repeatedly defying government projections.
Nevertheless, the short-term change has been striking. At the beginning of the year, the Congressional Budget Office projected that this year's deficit would be $371 billion and the White House Office of Management and Budget put the figure at $423 billion.
Of course, it is likely that the Republican entities were using bullshit numbers to predict this thing in the first place. And furthermore, these increased revenues are not "trickling down" to people who need it. And the volatility, the lack of any long term structural soundness of the budget fininancing is repugnant.
But wait there's more: bonddad over at Kos picks the numbers apart:
So of course, Powerline is just wetting themselves over this. "The tax cuts pay for themselves". Then they get a handy little graph that shows total federal receipts. Get that? Total federal receipts. There's one huge, glaring, incredibly fucking obvious problem with this. The tax cuts only targeted individual tax receipts, which, as the Times author points out:
Despite almost five years of economic growth, individual income taxes -- the biggest component of federal tax revenues -- have yet to reach the levels of 2000. Even with surging payments for investment profits and business income, individual tax payments in 2005 were only $972 billion -- below the $1 trillion reached in 2000, even without adjusting for inflation.
Actually, the Times author transposed the 2005 figure, which should be 927 billion.
You Jackasses might want to check the Congressional Budget Office as well, because they confirm it. If you don't believe them, try the Bureau of Economic Analysis, because they confirm what the Times and the CBO said. Receipts from individual income taxes (not all taxpayers, just the people who actually had their taxes cut you nimrods), were $994 billion in 2001 and $927 billion in 2005. I realize you guys are lawyers, but 927 IS LESS THAN 994 - unless you subscribe to Republican fuzzy math. Which you morons obviously do.
Powerline then goes on to say the budget deficit is shrinking. Really? Then why is federal debt issuance near an all-time high? Does the treasury just feel like issuing all this debt?