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Wednesday, February 12, 2020

US Treasury Revenue up 9.5% while Spending Soars 22.2% in January 2020

My table below shows a "Summary of Receipts, Outlays, and the Deficit/Surplus of the U.S. Government by Month Through January 2020."  

Monthly US Treasury Statement Calculations

  • A staggering 22.1 cents of ever dollar spent so far in fiscal 2020 came from new borrowing!
Year over year change for January:
  • Monthly revenue (taxes, fees and tariffs) grew 9.5% over 2019
  • Monthly spending grew 22.2% vs 2019
  • The monthly deficit grew $32.5B vs falling $8.7B in 2019 
  • but year over year the total deficit grew 25.4%!!!

Some try to blame the Trump tax cuts on the deficit, but clearly the revenue collected is higher.  The reasons for higher revenues are:

  1. Lower tax rates for corporations gave them money to expand, pay raises, increase dividends.  For example, the Minimum wage in Google's home city Mountain View, CA is $15.65 per hour.  I've heard Walmart in Mountain View starts most workers at about $20 per hour if they have better skills and non-English speaking dishwashers.
    Higher dividends paid to shareholders means more income to stockholders that get taxed.
  2. Removing the deductibility of state income, property and sales taxes, which are very high in California, raised taxes on the wealthy in blue states. 
  3. Tariffs from the Trade war increase revenue. 
If any of the politicians were concerned about the deficits, they would speak of how they will lower spending or increase productivity in the business sector to attract even more high paying jobs to the US.

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