[politics] Heritage: Biden Raised Taxes, but Tax Revenues Are Way Down This Year

[Mr.Jhorjan]

 

Posted Saturday at 06:10 PM
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Preston Brashers, Senior Tax Policy Analyst at Heritage Foundation has a new analysis on the relationship between the Biden Administration's higher taxes, but lower tax receipts.

In 2023, despite implementing tax hikes amounting to over $60 billion, U.S. tax revenues have fallen by almost $400 billion, marking a 13% drop in tax receipts from the previous year. This unusual decline can be attributed to several factors:

Slow Economic Growth: Economic growth has slowed, leading to stagnant incomes and reduced tax receipts, especially in capital gains taxes.

Explosion of Green Tax Credits: The Inflation Reduction Act introduced numerous green tax credits, which have proven to be more costly than anticipated, potentially exceeding a trillion dollars over a decade.

IRS Regulatory Activism: The IRS expanded the size of green tax credits through regulatory interpretations, allowing for loopholes that led to a significant increase in electric vehicle sales through leases.

COVID-19-Era Employee Retention Credits (ERC): ERC, initially created for pandemic relief, has seen widespread abuse and fraudulent claims, with billions paid out long after the pandemic ended.

Flaws in Budget-Scoring Process: Budget models used by government agencies do not account for economic growth and can be manifested by legislators, leading to claims of deficit reduction while the national debt continues to grow.

 

The United States will sooner or later be faced with a serious reality check: the sea of debt being accumulated at a breakneck pace is not sustainable.

 

https://uspolicy.org/heritage-biden-raised-taxes-but-tax-revenues-are-way-down-this-year/