“We’re actually taking in more revenue now than we did when we had the higher taxes because the economy’s doing so well.”
— President Trump, in an interview with Rush Limbaugh, Jan. 6, 2020
The way the federal budget works is often a mystery to Americans. But it shouldn’t be to the president of the United States.
Here, the president makes a basic mistake. He asserts that even though he signed into law a bill cutting taxes in 2017, revenue has kept going up — a fact he attributes to a robust economy. Some listeners might even have gotten the impression that the tax cuts were paying for themselves — a false claim the administration made repeatedly before the passage of the tax bill.
But revenue was always supposed to be going up year after year, despite the tax cuts. And revenue is way down from what had been anticipated before Congress approved the tax cuts, which (along with higher spending) is the reason the federal budget deficit is soaring despite a good economy. Continue reading.