(RepublicanDaily.org) – Left-wing economic theories are taking another beating. A new report shows that tax cuts brought in by former President Donald Trump, which his critics said would only benefit the rich, have increased federal tax revenues. Basic economics predicts that would happen, but Liberals think they know better. Now, the government’s own figures say they don’t.
Federal revenue continues to soar with Trump tax cuts, CBO report shows | Just The News https://t.co/8X99mStvJD
— John Solomon (@jsolomonReports) January 16, 2023
In December 2017, Trump signed the Tax Cuts and Jobs Act, which aimed to reduce the incentive to find tax loopholes or list deductions by simplifying and lowering most taxes on businesses and individuals. The core of the bill related to personal income tax; standard deductions and family tax credits were almost doubled, while itemized deductions were reduced. Critics on the Left argued it would force the government to borrow more, increasing the national debt. Ever since the bill was passed, the liberal media has been claiming the tax cuts didn’t work, and just let businesses keep more of their money. Even the nonpartisan Congressional Budget Office (CBO) insisted the government would need to borrow more.
Now the CBO has been forced to admit it was wrong. The reality is, over the last five years, the federal government’s tax revenues have risen sharply. According to the CBO’s own figures, federal tax revenue for 2022 was a record $4.9 trillion — almost $500 billion higher than predicted. According to the CBO, “The largest error in projections of revenues… was an underestimate of individual income taxes,” exactly the taxes Trump cut the most.
In fact, nobody should be surprised by this. There’s a concept in economics called the “Laffer Curve,” which says if the government wants to raise the maximum possible amount of tax there’s an optimum level at which to set taxes — and it isn’t the highest. If taxes seem reasonable, people will be willing to pay them. If taxes seem too high, people will make more effort to avoid them, legally or otherwise, and after a certain point, tax revenues will start to fall.
The CBO’s figures suggest personal income tax rates were above the optimal point on the Laffer Curve; Trump’s tax cuts have moved them nearer to the optimum, increasing revenue. Of course, that won’t make the Left any happier, but it’s good for our economy.
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