When liberals criticize “trickle-down economics” (an invented term by the left, anyhow, but never mind that), one of the criticisms is that the low tax rates mean that the government has less money to spend.
Not that spending less money is a bad thing, but statistics for the first full month under the new GOP tax cuts proves that’s simply not the case. In fact, far from it.
According to data released by the Treasury Department Monday, the federal government collected roughly $361,038,000,000 in tax revenue last month — a record for the month of January, according to CNS News.
The New York Times reported that most of the provisions of the GOP tax plan took effect in January, although it won’t be until February that workers will see an increase in their paychecks.
Perhaps the bigger news was that outlays for the federal government were only $311,802,000,000. That means the government ran a surplus of approximately $49,236,000,000.
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Before you start jumping for joy, it’s worth noting that the federal government entered January with a deficit of $224,955,000,000 for fiscal year 2018, which means the surplus only brought that down to $175,718,000,000.
Nevertheless, even with the tax cuts, revenue still exceeded the $349,290,130,000 collected in January of 2017, which was itself a record.
Of course, tax cuts aren’t the only reason why revenues are up; a strong economy has likely had something to do with it (although tax cuts certainly do a good job of boosting the economy).
Tax revenues can also fluctuate from month to month, as government spending can, which means that surpluses aren’t likely to continue unabated. To do that, you would need to cut spending. Perhaps unsurprisingly, that seems to be the GOP’s next priority.
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According to Bloomberg, the president’s fiscal year 2019 budget will likely contain significant cuts to entitlement programs totaling $1.7 trillion over a decade.
That figure is based on a document obtained by Bloomberg News, which specifically mentions Medicare as being targeted for the biggest cuts — $237 billion, to be exact.
The document doesn’t lay out where other cuts could come, but food stamps, agricultural subsidies, Medicaid, Social Security and other welfare programs would likely also see cuts under Trump’s plan.
The plan also includes spending increases for defense and border security, including the president’s vaunted wall.
While the plan is unlikely to be taken up verbatim by Congress — spending bills originate in the Congress, after all, and the legislature likes to maintain its purview over such matters in spite of the fact that the White House submits budget proposals — it could be a rough sketch of how a GOP-controlled Congress would reduce spending while still rebuilding our military and increasing security at the southern border.
Either way, January was proof that the federal government can indeed make money with lower taxes. Take that, Democrats.
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