JT informed me that we will be discussing taxes and tax changes at the federal level tomorrow. Yay! So I thought by way of a bit of backdrop we would look at just a few pieces of information. Nothing new here or deep insights or pictures, just a starting point for the discussion. Start with federal tax revenues and outlays. This is not a pretty picture.
The one interesting think to point out with this graph is that you really can almost draw a straight line between the beginning and end of the financial crisis and connect the outlays line throughout. Tell me again that political party matters for spending! The revenues clearly dropped during the Great Recession and did recover after as well.
The deficit picture here is not very encouraging either. The natural, countercyclical move of the deficit during the recession was there in a predictable fashion. It started to come down and then reversed course, and has continued to do so. According to CBO projections we are about to see deficits set measured in trillions of dollars with really no sign of a change.
My takeaways at this point are: tax cuts are not paying for themselves, we have no sense of fiscal propriety anymore, and there is really no policy cushion available whenever the next crisis hits. This should make for interesting radio.