Feds Collect Record Taxes in First Month Under Tax Cut; Run Surplus in January

Discussion in 'Too Hot for Swamp Gas' started by G. Gordon Gator, Feb 13, 2018.

  1. G. Gordon Gator

    G. Gordon Gator GC Hall of Fame

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    Feds Collect Record Taxes in First Month Under Tax Cut; Run Surplus in January

    (CNSNews.com) - The federal government this January ran a surplus while collecting record total tax revenues for that month of the year, according to the Monthly Treasury Statement released today. January was the first month under the new tax law that President Donald Trump signed in December.

    During January, the Treasury collected approximately $361,038,000,000 in total tax revenues and spent a total of approximately $311,802,000,000 to run a surplus of approximately $49,236,000,000.
    ...
    The $361,038,000,000 in total taxes the Treasury collected this January was $11,747,870,000 more than the $349,290,130,000 that the Treasury collected in January of last year (in December 2017 dollars, adjusted using the Bureau of Labor Statistics inflation calculator).

    The Treasury not only collected record taxes in the month of January itself, but has now collected record tax revenues for the first four months of a fiscal year (October through January). So far in fiscal 2018, the federal government has collected a record $1,130,550,000,000 in total taxes.
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  2. madgator

    madgator GC Hall of Fame

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    but the media is telling us that there's supposed to be massive deficits.....what gives?
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  3. philobeddoe

    philobeddoe GC Hall of Fame

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    Ya know ..... I've always wondered about reports such as this. Heck ... Q4 tax deposits were due 1/16/18 so I expect a lot of 1040-ES and 1120-W filings were made in the first 2 weeks of Jan18. I know a few folks who deferred a large portion of their 2017 estimated payments into Jan of 2018. Then ... you have 941 deposits hitting in Jan18 that include withholding on year-end incentive comp payments.

    I suspect this is why Jan18 collections were so high.
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  4. g8orbill

    g8orbill Old Gator VIP Member

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    nice numbers but I will reserve comment until Jn of 2019- then we will have an idea
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  5. G. Gordon Gator

    G. Gordon Gator GC Hall of Fame

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    It's not necessarily unusual for there to be a monthly surplus for the month of January. In fact it happened in 13 of the last 20 Januaries. But it's worth noting that six of the seven times when there was not a January surplus...were all on Obama's watch.

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  6. howdygator

    howdygator GC Hall of Fame

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    Wait, you're counting January of 2009 there?
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  7. oragator1

    oragator1 Premium Member

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    January often has a surplus, in fact even with the record tax revenues (and the article is carefully worded), the monthly surplus is less than January last year by a few billion. And last year we ended up down almost 700 billion on the year. The record receipts this year are more likely to be from stock gains than anything, most of the tax effects to this point would be negative (until the cuts roll through the economy and create actual tax revenues, that takes some time).
    For the fiscal year we are around 200 billion in the red already, and the next few months tend to be bad months because of tax refunds.
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  8. Gatorrick22

    Gatorrick22 VIP Member

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    You know what I just noticed... That right about the time that the Fed raised it's interest rates to the high of near or at 6% that we had that Great Recession...

    I hope the fed doesn't sabotage our economy with untenable high interest rates anytime soon. Greenspan did that to Bush 41 and he lost re-election partly because of the dip in the economy... and because of that idiot Ross Perot.
  9. Gatorrick22

    Gatorrick22 VIP Member

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    Not so much when Obama was POTUS... Look at post #5 ;):eek:
  10. oragator1

    oragator1 Premium Member

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    And keeping them artificially low creates bubbles. Letting them float creates booms and busts far too often. Tough job for the fed.
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  11. Gatorrick22

    Gatorrick22 VIP Member

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    It's certainly a balancing act for the Fed. But we can;t afford 6% interest rates no matter how on fire our economy is, unless they want to crash the damn thing again like 2008. That... we cannot afford.
  12. oragator1

    oragator1 Premium Member

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    We have had 6 percent rates for long periods before, the rate itself wasn’t the issue. The issue was the arficially low rates we had for the decade before that which created the bubble. All that loose money had to flow somewhere and it went largely into housing for many reasons, some as bad as the low rates themselves...which wasn’t sustainable.
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  13. howdygator

    howdygator GC Hall of Fame

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    This always happens when money is cheap. It doesn't always make the economy tank. It did for the Great Recession because so much consolidation happened with the proliferation of subprime mortgages - it was a unique situation.
  14. wgbgator

    wgbgator Very Stable Genius Premium Member

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    I'll just leave this here

    https://www.nytimes.com/2018/01/31/us/politics/united-states-debt-limit.html

  15. wgbgator

    wgbgator Very Stable Genius Premium Member

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    Also, its not like anyone adjusted their payrolls on January 1st. For all intents and purposes, if you got a paycheck, January was under the old tax system, you didn't really see adjustments until February. The IRS doesn't work that fast.
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  16. dangolegators

    dangolegators GC Hall of Fame

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    That's just average revenue growth. January 2018 revenue was 4.9% higher than January 2017 revenue was. But January 2017 revenue was 9.7% higher than January 2016 revenue was. Using the linked document in the article, I calculated Jan to Jan revenue growth rate over the past 6 years:

    2012-13 16.2%
    2013-14 8.8%
    2014-15 3.6%
    2015-16 2.2%
    2016-17 9.7%
    2017-18 4.9%

    So there is nothing special about 2018 revenues, and as noted, the tax cut would not have had much effect on January revenues. So we'll see how it goes from February on.
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  17. Gatorrick22

    Gatorrick22 VIP Member

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    Sub-primes were a huge, major part of it too, but it wasn't the only factor.
  18. howdygator

    howdygator GC Hall of Fame

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    Sub-primes are what lenders had to do to make money when money was effectively free. They needed new ways to make up the money. One of them was risky subprimes, the other was variable rate loans of various kinds. When the rates went up, all of that blew up.
  19. Gatorrick22

    Gatorrick22 VIP Member

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    Do you really want to rehash the sub-primes problem again. We all know that was something that should have never happened in the first place
  20. howdygator

    howdygator GC Hall of Fame

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    Rehash? We're just pointing out why interest rates rising does not inherently lead to recession.

    That's why subprime is being discussed
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