Government Has Taxing And Spending Problems
December 14, 2019 at 5:08 a.m.
By Gary [email protected]
Given the current state of affairs with the federal budget, I’m wondering where the rest of the people like me are in Washington these days.
Remember the good old days when Republicans used to chastise Democrats for spending too much. “How are you going to pay for that?” they would ask.
Those days are gone. In fact, these days it might as well be the Democrats asking the very same thing.
Because these days, Republicans spend money like a newly minted Powerball winner. Frankly, nobody from either party seems to be operating with any level of fiscal restraint.
Of course, today’s Democrats blame it all on free-market policies like tax cuts.
I’m not so sure about that.
In fact, according to the monthly treasury statement released earlier this week, the federal government collected record total tax revenues of $470.7 billion in October and November – the first two months of fiscal 2020.
OK, but despite collecting that record amount in taxes, the federal government still ran a deficit of $343.36 billion during he same time period.
Why? Because it spent $814.012 billion in those two months.
According to the U.S. Treasury, it was the second-highest federal spending during October-November in U.S. history.
The first?
That was in 2009 when Congress enacted the Troubled Asset Relief Program to bail out insolvent banks during the Great Recession.
So just for fun, let’s look at the budget over the last 10 years. First revenue – the amount of money (in trillions)– collected by the government each year to run the country:
FY 2020 – $3.64 (budgeted)
FY2019 – $3.44 (estimated)
FY 2018 – $3.33
FY 2017 – $3.32
FY 2016 – $3.27
FY 2015 – $3.25
FY 2014 – $3.02
FY 2013 – $2.77
FY 2012 – $2.45
FY2011 – $2.30
Those are all records. Each year, the government set a new record for revenue collection.
Now, lets look at the other side of the equation – spending. These, of course, are all deficits. That’s the amount of money the government spent, minus the amount it collected, again, in trillions.
FY 2020 – $1.101 (budgeted)
FY2019 – $1.091 (estimated)
FY 2018 – $.779
FY 2017 – $.665
FY 2016 – $.585
FY 2015 – $.438
FY 2014 – $.485
FY 2013 – $.679
FY 2012 – $1.087
FY2011 – $1.3
When one looks at this it becomes clear that regardless of which party is running the show, Congress always spends more than it takes in. Each year, revenue to the treasury grew to a record. But at the same time, Congress spent it all and then some, running up more national debt, which is now a staggering $22 trillion and change.
In just those 10 years our venerable leaders in Washington amassed more than $7.1 trillion in debt.
So you tell me. Does Washington have a taxing problem or a spending problem? Are we taxed too little or does the government spend too much?
Frankly, it’s probably both.
While I have aways espoused free market principles like lower taxes and fewer regulations, sometimes those policies can get out of hand.
For example, the New York Times recently did an investigation into the effects of the most recent round of tax cuts. It found that FedEx paid no federal income tax in 2018. Zero. The year before it paid $1.5 billion under the old law.
FedEx has tons of airplanes using taxpayer funded runways, ships using taxpayer funded ports and trucks using taxpayer funded roads. Certainly FedEx employees paid their share of federal income tax. But FedEx corporate should, too.
One could argue that FedEx, after receiving it’s tax holiday, chose to increase capital spending, further expanding the tax base by creating jobs, but one would be wrong.
FedEx’s capital outlays actually fell. But FedEx did spend more than $2 billion on stock buybacks and dividend increases, more than double the amount it spent on those things in 2017.
To be fair, the company did expand hiring, pension contributions and wages to a degree, but most of the savings went to shareholders.
A Who’s Who list of U.S. corporate giants experienced similar tax windfalls.
Meanwhile, federal spending on infrastructure – roads, airports, ports – remains stagnant.
Now see, that’s just wrong.
I get that lower corporate income taxes can boost investment, jobs and the economy. But this goes well beyond what’s reasonable.
No matter how liberal you are, you have to agree that government has a significant spending problem.
And no matter how conservative you are, you have to agree that companies like FedEx paying no federal income tax is a revenue problem.
If only lawmakers on both sides of the aisle could work together to rectify this situation-.
Sadly, I don’t see that happening – ever.
Latest News
E-Editions
Given the current state of affairs with the federal budget, I’m wondering where the rest of the people like me are in Washington these days.
Remember the good old days when Republicans used to chastise Democrats for spending too much. “How are you going to pay for that?” they would ask.
Those days are gone. In fact, these days it might as well be the Democrats asking the very same thing.
Because these days, Republicans spend money like a newly minted Powerball winner. Frankly, nobody from either party seems to be operating with any level of fiscal restraint.
Of course, today’s Democrats blame it all on free-market policies like tax cuts.
I’m not so sure about that.
In fact, according to the monthly treasury statement released earlier this week, the federal government collected record total tax revenues of $470.7 billion in October and November – the first two months of fiscal 2020.
OK, but despite collecting that record amount in taxes, the federal government still ran a deficit of $343.36 billion during he same time period.
Why? Because it spent $814.012 billion in those two months.
According to the U.S. Treasury, it was the second-highest federal spending during October-November in U.S. history.
The first?
That was in 2009 when Congress enacted the Troubled Asset Relief Program to bail out insolvent banks during the Great Recession.
So just for fun, let’s look at the budget over the last 10 years. First revenue – the amount of money (in trillions)– collected by the government each year to run the country:
FY 2020 – $3.64 (budgeted)
FY2019 – $3.44 (estimated)
FY 2018 – $3.33
FY 2017 – $3.32
FY 2016 – $3.27
FY 2015 – $3.25
FY 2014 – $3.02
FY 2013 – $2.77
FY 2012 – $2.45
FY2011 – $2.30
Those are all records. Each year, the government set a new record for revenue collection.
Now, lets look at the other side of the equation – spending. These, of course, are all deficits. That’s the amount of money the government spent, minus the amount it collected, again, in trillions.
FY 2020 – $1.101 (budgeted)
FY2019 – $1.091 (estimated)
FY 2018 – $.779
FY 2017 – $.665
FY 2016 – $.585
FY 2015 – $.438
FY 2014 – $.485
FY 2013 – $.679
FY 2012 – $1.087
FY2011 – $1.3
When one looks at this it becomes clear that regardless of which party is running the show, Congress always spends more than it takes in. Each year, revenue to the treasury grew to a record. But at the same time, Congress spent it all and then some, running up more national debt, which is now a staggering $22 trillion and change.
In just those 10 years our venerable leaders in Washington amassed more than $7.1 trillion in debt.
So you tell me. Does Washington have a taxing problem or a spending problem? Are we taxed too little or does the government spend too much?
Frankly, it’s probably both.
While I have aways espoused free market principles like lower taxes and fewer regulations, sometimes those policies can get out of hand.
For example, the New York Times recently did an investigation into the effects of the most recent round of tax cuts. It found that FedEx paid no federal income tax in 2018. Zero. The year before it paid $1.5 billion under the old law.
FedEx has tons of airplanes using taxpayer funded runways, ships using taxpayer funded ports and trucks using taxpayer funded roads. Certainly FedEx employees paid their share of federal income tax. But FedEx corporate should, too.
One could argue that FedEx, after receiving it’s tax holiday, chose to increase capital spending, further expanding the tax base by creating jobs, but one would be wrong.
FedEx’s capital outlays actually fell. But FedEx did spend more than $2 billion on stock buybacks and dividend increases, more than double the amount it spent on those things in 2017.
To be fair, the company did expand hiring, pension contributions and wages to a degree, but most of the savings went to shareholders.
A Who’s Who list of U.S. corporate giants experienced similar tax windfalls.
Meanwhile, federal spending on infrastructure – roads, airports, ports – remains stagnant.
Now see, that’s just wrong.
I get that lower corporate income taxes can boost investment, jobs and the economy. But this goes well beyond what’s reasonable.
No matter how liberal you are, you have to agree that government has a significant spending problem.
And no matter how conservative you are, you have to agree that companies like FedEx paying no federal income tax is a revenue problem.
If only lawmakers on both sides of the aisle could work together to rectify this situation-.
Sadly, I don’t see that happening – ever.
Have a news tip? Email [email protected] or Call/Text 360-922-3092