10/31/2019

Tax Receipts in 2019 Down $28 Billion

The CBO said the government collected billions less than was initially projected

The federal government took in $28 billion less in total tax receipts in 2019 than was initially projected, according to the Congressional Budget Office (CBO). The revenue decline may have been influenced by tax changes enacted in Republicans’ 2017 Tax Cuts and Jobs Act (TCJA) but CBO stopped short of saying that definitively.

“In short, revenues in fiscal years 2018 and 2019 were a bit lower than the Congressional Budget Office anticipated in early 2018, but whether that result is related to the effects of the tax act is unknown,” CBO said in a Oct. 29 letter to Sen. Mike Braun (R-IN).

Republicans reasoned in 2017 that the cost of the tax law, which cut the corporate rate from 35 percent to 21 percent and reduced individual tax rates as well, would be offset by resulting economic growth. U.S. economic growth has been at about 2 percent for most of the year. The CBO estimated the tax law will cost $1.9 trillion over the next decade.

Early signs of a slowing economy has the Trump administration debating whether another tax reduction and economic stimulus package is warranted. Rep. Lloyd Doggett (D-TX), a member of the House Ways and Means Committee, said another tax cut plan from President Trump is not going to get through the Democrat-controlled House.

“I would expect this would just be another distraction from the fact that he’s about to be impeached,” Doggett told The Washington Post, adding that Congress still has work to do “to correct the many shortcomings of his last bill.”

This article was provided to OSAE by the Power of A and ASAE's Inroads.