President Joe Biden unintentionally conceded last year that the Trump tax cuts were working when making the pitch for his fiscal year 2023 budget. Keep in mind the Trump tax cuts are still largely in place, despite Biden’s efforts to repeal them. “[W]e have generated a GDP growth of 5.7 percent, the best economic growth we’ve seen in this country in over 40 years. This has led to a substantial increase in government revenues and dramatically improved our fiscal situation,” Biden said in March 2022. The numbers speak for themselves: The federal treasury took in $4 trillion in fiscal year 2021 and $4.9 trillion in FY 2022. Revenue dipped back down in FY 2023 to $4.44 trillion as the economy slowed under the weight of Biden’s and the Democrats’ inflationary spending policies, which have been dialed back again since Republicans took back control of the House. By way of comparison, the federal government took in $3.3 trillion in revenues in 2017, prior to the Tax Cuts and Jobs Act being implemented. So federal revenue overall is up over $1 trillion per year. The concept is simple, though most Democrats don’t seem to get it: A growing economy generates more revenue for the Treasury. The economy grew at a healthy 4.9 percent during the third quarter of this year. Biden mentioned last year the economy experienced the best growth rate in four decades. Forty years takes us back to Ronald Reagan’s first term, when, following across-the-board tax cuts like those passed under Trump, the economy took off, experiencing 4.58 percent growth in 1983 and 7.2 percent in 1984. It should also be noted that federal tax revenues doubled during the 1980s, from approximately $500 billion to almost $1 trillion, as the economy grew by over $2.5 trillion, from $7.32 trillion to $9.94 trillion GDP. It’s nice to see that economists at Ivy League schools and the Treasury are honest enough to admit the Trump tax cuts worked.
Taxes actually do matter (Part I). Companies that saw larger reductions in tax rates from the TCJA also experienced larger increases in investment in the years that followed.From a cool new paper by @gchodorowreich @omzidar Eric Zwick & Matthew Smithhttps://t.co/DHEDNVRubv pic.twitter.com/KL85iutprY — Jason Furman (@jasonfurman) October 20, 2023
This article appeared originally on The Western Journal.