From Swagel, “CBO’s Estimates of the 2017 Tax Act: Growth and Revenues” released today:
CBO’s April 2018 projections of revenues in 2018 and 2019 were remarkably
accurate.Actual federal revenues in 2018 and 2019 were 99.8 percent and 99.2 percent of
the amounts that CBO projected. In other words, CBO was very slightly
overoptimistic about revenues in the years after enactment of the 2017 tax act,
and the agency’s revenue projection errors for those years were much smaller
than average.
Compare and contrast with Stephen Moore’s screed, in arguing that the OBBBA would jump-start the economy and tax revenues:
The CBO and JCT routinely overestimate revenue from tax-rate increases as well as losses from tax cuts. The most recent example is the CBO estimate of the 2017 Trump tax cut’s fiscal effects. Its prediction has proved almost $1.5 trillion too low so far.
The explanation for this persistent error is that the CBO’s and JCT’s computer models fail to take adequate account of how tax-rate changes affect the amount and timing of businesses’ and workers’ decisions—including how much to save, invest and work. Higher tax rates also lead to more tax-avoidance strategies. Imagine how many decisions you would make differently if your income-tax rate rose from 20% to 50%.
Though the modelers now do some dynamic scoring, even this insufficiently accounts for the macroeconomic effects of lower taxes on growth.
I guess the pandemic, high inflation, and the immigration surge in the intervening years don’t have anything to do with what revenues did.
Remember, Moore is the guy who thought the Rich States/Poor States Economic Outlook index had any predictive power, that a boom was in the offing in March 2020, lauded the Brownback boom for Kansas, and so many other wrong things.
10 year yield is up today. it has risen since the fed cut rates this week. there is a real threat that trump forcing the fed to cut rates will result in longer term debt tied to the 10 year to increase their rates. this includes mortgages. trump very well could pressure the fed into increasing housing costs. and then he will simply blame the fed for the unaffordable housing crisis that he caused.
Moore makes money by being the #1Maga moron
trump knows that dropping the fed rate may very well increase 10 years, and thus mortgages. but he needs fed rates low so that he can use short term treasuries to fund his tax cuts over the next couple of years. he does not care once out of office, but he needs to address this big issue while he is in office. and he has a bunch of blue collar workers who support him unconditionally, and are about to get screwed, with higher mortgages and other debt. just so trump can pay for his tax cuts in the short term. because if interest on the debt balloons in the next few years, trump is screwed.