What Happened To The Revenue?

On Tuesday, Issues & Insights posted an article about tax revenues under the Biden administration. The Laffer Curve is at work.

The article reports:

Friday afternoon, the Treasury Department reported that, despite a growing economy and low unemployment, the federal deficit shot up by $320 billion in fiscal year 2023. That’s unusual. But what’s really bizarre is why the deficit exploded.

According to the report, overall spending actually dropped by 2% compared with 2022 as the COVID-19 spending splurge abated.

What drove up the deficit this year was a sudden and completely unexpected 9% drop in tax revenues. Not only did revenues come up hundreds of billions lower than last year, but they were well below what everybody expected them to be.

At the start of the year, the Treasury Department and the Office of Management and Budget projected revenues for fiscal 2023 at around $4.7 trillion. The Congressional Budget Office figured it would be $4.8 trillion.

The actual amount: $4.4 trillion.

In other words, there’s between $300 billion and $400 billion worth of missing tax revenues.

…In a normal world, a better-than-expected economy would result in more revenues for the federal government, not less.

Keep in mind, too, that it’s exceedingly rare for tax revenues to drop from one year to the next. In fact, it’s happened only eight times since 1960 – always around an economic downturn – and the average decline was just 4.7%. Even when the COVID lockdowns caused a massive recession, revenues only dipped by 1.2% in 2020. (Revenues plunged nearly 17% during the financial crisis.)

It’s also worth noting that revenues continued to climb after the Kennedy, Reagan and Trump pro-growth tax cuts went into effect.

The article concludes:

But that’s not what happened this year. The federal government is still tremendously bloated – spending in 2023 will be 43% higher than it was the year before COVID-19. The national debt now tops $33 trillion. Social Security and Medicare are racing toward insolvency. Biden is pushing Congress for another $100 billion to finance the never-ending war in Ukraine and provide aid to Israel.

Did the Biden administration overcount revenues in the past two years to paper over the colossal spending increases? Is the White House goosing employment and other economic data today to make the economy look better than it is? Is Biden’s budget team just hopelessly incompetent?

Preston Bashers of the Heritage Foundation speculates that the shortfall could be the result of a sharp drop in capital gains tax revenues, the explosion in “green” tax credits, and other factors.

Somebody in the Biden administration should be made to explain what happened.

In the meantime, we’re now deeper in debt than ever. Way to go Brandon.

I am not sure, but I don’t believe there is anyone in the Biden administration who has actually run a business. We need to go back to the days of putting a businessman in the White House–not a politician.

When It’s Not Your Money, You Don’t Always Spend It Wisely

One of the problems with the establishment in Washington, D.C., is that they do not treat the taxpayers’ money as if it were their own. Actually, the problem is not limited to Washington–how many politicians offices have spend thousands of dollars simply on drapery? Just as an example, in November 2013, The Boston Globe reported that Massachusetts Governor Deval Patrick, who spent $27,000 on new drapes and furniture for his office early in his first term, has authorized a $9 million project to dramatically upgrade the office before he leaves in 2014. The Biden White House has made a recent purchase that illustrates the problem of not shopping carefully.

On March 11, The Washington Free Beacon reported the following:

The Office of Management and Budget spent $2,735 in October for the order and delivery of the 12′ by 9′ rug, the government documents show. The custom Bora Bora rug in the chosen color of “Starfish” was sold to the agency for $1,972, with additional costs attributed to freight, delivery, and padding.

A Washington Free Beacon investigation found that the White House budget office likely got ripped off, and could have purchased an identical rug for far less than what it paid. The Bora Bora rug is manufactured by Fabrica and cut into custom sizes by retailers. New York-based carpet retailer Kanter’s Carpet & Design Center told the Free Beacon it charges just $1,600 to custom-build a 12′ by 9′ Bora Bora rug, a price the company said includes binding, pads, and local delivery.

That may seem like a small thing, but it illustrates how careless the government and its minions are with taxpayers’ money. That’s $1100 that could have been used toward the deficit. It would only be a drop in the bucket, but how many other ‘drops in the bucket’ are out there?

At a time when Americans are being severely hurt by inflation, it would be nice if the White House would curtail its spending a little. 

 

When Is A Law Not A Law?

The Epoch Times posted an article today about the federal vaccine mandates.

The article reports:

Several Republican attorneys general have said that President Joe Biden’s federal mandate for COVID-19 vaccinations hasn’t yet come into effect for private businesses, adding that if it is ordered, they will file lawsuits against it.

Montana Attorney General Austin Knudsen, a Republican, noted that the White House only last week submitted the text of its emergency rule regarding vaccinations to the Office of Management and Budget, meaning it hasn’t gone into effect.

But, Knudsen noted that “no such rule or regulation is currently in effect,” adding (pdf) that there has been a “great deal of confusion” over Biden’s announcement last month.

“Further, my office is preparing to immediately challenge and enjoin this federal overreach on a variety of grounds when the Biden administration issues its announced rule,” he said.

On Sept. 9, Biden announced that he would direct the Occupational Safety and Health Administration (OSHA) to mandate that all private businesses with 100 or more employees force their workers to get vaccinated or submit to weekly testing. Details about the rule, including fines, have not been released, and White House press secretary Jen Psaki couldn’t answer questions earlier this month about a timeframe on when it would be unveiled.

There is nothing in the U.S. Constitution that gives the federal government the power to order people to take medicine they do not want to take. It may be possible for some states or local entities to find that power under public health laws, but there is no federal precedent for such a requirement.

The article concludes with an interesting statement about the double standard being applied to Americans and those crossing the border illegally:

Arizona Attorney General Mark Brnovich, a Republican, already filed a lawsuit against Biden’s vaccine requirement, arguing that it would violate the Equal Protection Clause of the Constitution. The mandate would treat American workers differently than illegal immigrants who are crossing into the United States from Mexico, arguing that illegal aliens are able to decline the vaccine.

But last week, Biden said that his private-sector mandate will take effect “soon” and will address the “unacceptably high number” of people who have not taken the vaccine.

“The Labor Department is going to soon be issuing an emergency rule for companies with 100 or more employees to implement vaccination requirements,” Biden said on Oct. 14, referring to the mandate.

Earlier this month, a Department of Labor spokesperson told The Epoch Times in an email that OSHA has been working “expeditiously” to develop the rule, which it described as an “emergency temporary standard.”

The Epoch Times contacted the Department of Labor on Sunday for additional comment.

If the government moves at its typical speed, the word “expeditiously” may mean it will be done by 2024. Meanwhile, we need Attorneys General who will protect our rights. It has never been more obvious that your vote for local and state officials is as important as your vote for President.

Hopefully There Are Some People In Congress With Common Sense

Just the News is reporting that West Virginia Democratic Senator Joe Manchin and Republican Senator Susan Collins have both stated that they will vote against the confirmation of President Biden’s pick to lead the Office of Management and Budget – Neera Tanden. I need to say here that generally I believe an elected President is entitled to his picks for his cabinet, but some of President Biden’s picks are well outside the political mainstream.

The article reports:

Tanden is president of the liberal public policy research and advocacy group Center for American Progress, founded by former President Clinton chief of staff John Podesta.

Her statement also echoed Manchin’s concerns: “Neera Tanden has neither the experience nor the temperament to lead this critical agency. Her past actions have demonstrated exactly the kind of animosity that President Biden has pledged to transcend.”

Collins also pointed out that Taden’ decision to delete more than a thousand tweets in the days before her nomination was announced “raises concerns about her commitment to transparency.”

Said Manchin: “I believe her overtly partisan statements will have a toxic and detrimental impact on the important working relationship between members of Congress and the next director of the Office of Management and Budget. For this reason, I cannot support her nomination.”

Manchin’s “no” vote means Senate Democrats need at least one Republican to vote in favor of Tanden to get her nomination through the chamber.

Unfortunately there may actually be a least one squishy Republican who will vote for her confirmation.