Tuesday, March 19, 2019

Trump's Fake Trillion Dollars in Budget Revenue

Should President Trump's budget revenue projections be considered a combover?

His budget blueprint for the next decade relies on up to $1.2 trillion in revenue that might not materialize, reports The Wall Street Journal.

The budget assumes the government will collect as much as that amount between 2020 and 2029 from taxes the administration opposes or from scheduled tax increases that are likely to draw strong business opposition. The $1.2 trillion estimate comes from the Committee for a Responsible Federal Budget, an independent bipartisan nonprofit.

Here's The Journal with the blow-by-blow:
As much as $390 billion comes from taxes created by the Affordable Care Act, which Mr. Trump wants to repeal, according to the group’s estimate. Some taxes linked to the 2010 law are broadly unpopular, and Congress has repeatedly deferred levies on high-cost employer health insurance and medical devices with bipartisan votes.

The budget also assumes businesses will, as scheduled, gradually lose the ability to deduct capital expenses immediately, though administration officials consistently praise that provision’s economic importance. Extending immediate deductions for capital costs would cost $170 billion, the Committee for a Responsible Federal Budget said.

The 2017 tax law also created temporary incentives for alcohol producers and businesses that provide family leave, both of which expire this year, and it imposed limits on business deductions for research and interest costs that don’t kick in until 2022.

The budget doesn’t explicitly mention any of those items, meaning it assumes the expirations and effective dates will go ahead as scheduled. If so, taxes would go up for many businesses. Companies are already gearing up to urge Congress to push off many of these tax increases.

By including revenue from expected scheduled expirations in the budget, the administration set fiscal targets in such a way that it either has to support those tax increases happening as scheduled or find replacement revenue.
Of course, Trump's revenue projections are wildly optimistic, to begin with, beyond this.

We are headed toward a very real financial disaster.


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