This is the best summary I could come up with:
America’s federal budget deficit effectively doubled in the 2023 fiscal year as slumping tax receipts, rising interest rates and persistent demand for expiring pandemic relief benefits strained the nation’s finances.
On Friday, Mr. Biden’s administration formally asked Congress to approve more than $100 billion in emergency spending that includes military aid to Ukraine and Israel, humanitarian assistance in those countries and in Gaza, and a range of new efforts to improve America’s border security.
For example, the Internal Revenue Service has been funneling out billions of dollars in tax refunds related to the Employee Retention Credit, a pandemic-era benefit that was recently paused because of concerns about fraud.
“The increase in the deficit last year was largely caused by a sharp fall in tax revenues, while spending on programs other than Social Security, Medicare and Medicaid actually fell slightly as a share of the economy,” said Lael Brainard, who heads Mr. Biden’s National Economic Council.
Some administration officials concede the president may need to propose even more expansive deficit reduction — almost certainly in the form of more tax increases on high earners and corporations — in the future if interest costs do not recede.
“It’s the mandatory spending and the entitlement programs that are really driving the debt, and that if we don’t address them we’ll truly bankrupt this country,” Representative Jodey C. Arrington of Texas, the Republican chairman of the House Budget Committee, said this week.
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“The increase in the deficit last year was largely caused by a sharp fall in tax revenues…”
So, this is the beginning of the Trump era tax cuts for the wealthy and corporations. They have been using this as an excuse to cut down social programs, cut funding to various government departments, and shutdown the government with their petty tantrums.
Tax revenues increased after those tax cuts. It will help to read about the Laffer curve. There is a kind if elasticity of demand for tax revenue. When raising taxes, some proportion of economic activity, including people working, is reduced. This can lead to a net decrease in tax revenue. The opposite is also true. The Laffer curve stipulates that there is an optimal tax efficiency on the vertex.
Of course this has nothing to do with fair distribution. It simply means that, paradoxically, higher taxes would reduce the size of the federal budget.
Corporate tax needs to be increased.
Even if it results in less tax revenue, and poor people becoming even poorer? I don’t agree. I think we should help poor people, not hurt them.
P.L. 115-97 permanently reduced the 35% CIT rate on ECI to a 21% flat rate for tax years beginning after 31 December 2017.
We changed the corporate tax rate in 2017 and 2014 and have been collecting less and less taxes. Since corporations l are people, and they make the most amount of taxable income, we should be charging them more! They use public services such as roads and cause more pollution etc we should not be subsidizing their use.