If the economy is so bad, why are tax receipts up?

[RecycleMichael]

I don't have a fancy finance degree, so one of you smarter posters will have to help me understand. My reference is Fox News, so it may not be accurate.

http://www.foxnews.com/us/2012/06/12/us-states-forecast-highest-tax-revenue-in-5-years34520/print

Published June 12, 2012

WASHINGTON –  U.S. states expect to collect higher tax revenue in the coming budget year that combined would top pre-recession levels, according to a survey released Tuesday. The increase could reduce pressure on states to cut budgets and lay off workers. A slowly healing job market and modest growth have boosted sales and income taxes, which provide nearly three-quarters of state revenue. Overall corporate income taxes are also growing.

Still, many states continue to struggle with budget shortfalls. And some states, such as California, are seeing greater revenue only after raising taxes to stem deficits. Total tax revenue is forecast to rise 4.1 percent to $690.3 billion in the 2013 budget year, according to a twice-yearly survey by the National Governors Association and the National Association of State Budget Officers. It's the third straight year of revenue growth and $10 billion more than the budget year that ended June 2008. The recession began in December 2007.

Total state spending would increase only 2.2 percent and remain below pre-recession levels, the report said.

"The thing we're definitely seeing is stability," said Scott Pattison, executive director of the budget officers' group. Only eight states were forced to close unexpected mid-year budget gaps this year, he said, compared to 39 states two years ago. Arizona, Ohio and Michigan are anticipating some of the biggest increases in tax revenue next year.

Michigan has already benefited from higher revenue. Last year the state had its first surplus in a decade. That enabled state officials in February to cancel plans to require 37,000 state workers to take four days of unpaid leave.

In Ohio, tax revenue is projected to rise to $17.6 billion next year. That's an 8.6 percent increase from the current budget year. Democrats in the state legislature have responded by pushing for more school funding. GOP Gov. John Kasich has downplayed the improved forecast, saying year-to-date tax receipts are only modestly above estimates.

Others states are seeing less improvement. Iowa, Illinois and Arkansas are among those forecasting small increases.

[heironymouspasparagus]

Just what the graphs are showing. 

Do you think maybe reality is starting to impinge on Fox??

Nawww...can't happen.

[Conan71]

Actually you should be asking: "why are tax receipts up without a tax increase?"

Reaganomics at work.

[Gaspar]

Actually you should be asking: "why are tax receipts up without a tax increase?"

Reaganomics at work.

Do you mean to tell me that when corporate profits rise, tax receipts go up?

Poppycock!

Only tax increases on the rich can do that!

[erfalf]

Like the other posters are saying, just because A has happened does not necessarily mean that B caused it. Just because tax receipts are up does not mean that increases in income were the only reason, or a reason at all. It is a dynamic system, which is how reducing taxes appears to lead to increases in tax receipts. It is not a one to one relationship.

[Gaspar]

Like the other posters are saying, just because A has happened does not necessarily mean that B caused it. Just because tax receipts are up does not mean that increases in income were the only reason, or a reason at all. It is a dynamic system, which is how reducing taxes appears to lead to increases in tax receipts. It is not a one to one relationship.

Shhhh!  They've been trying to establish that increases in corporate profits do not translate into revenue increases or act as any from of economic stimulus.  Anyone knows that only tax increases on fat cats can do that.  You're ruining it!

[heironymouspasparagus]

What's really happening is that the economy has returned to pre-recession levels.  In all areas except employment.  Gee, I wonder if wholesale exportation of jobs had anything to do with that.  Or working people an extra 20%?

Reality sure does take a bite out of the Murdochian dogma about how the economy is crashing around our heads.


One side effect is now Fox has to re-spin to try to get around to the other side of it.  Probably will create hurricane strength winds in the process, so what out for wind storms!

I have already heard a little piece of it about two weeks ago from a guy - one of the Fox Faithful - when talking about something related to Fed spending.  The actual comment was, "but how will we pay for it...?"

I laughed my a$$ off at him - I was completely stunned by his comment.  Asked him when, and where did he suddenly come up with THAT???  (I already knew, I just had to make sure he understood that he wasn't gonna sneak that by.)

[RecycleMichael]

I still haven't heard an explanation. Aren't tax receipts a good economic indicator?

Tax receipts up, Dow up 40% under Obama, 20 plus consecutive months of private job growth...I know there are many other indicators, but these sound pretty important to me.

I don't know about other industries, but my business is way up. Recycling is up 10% across America in the last two years and we have seen dozens of new jobs created to handle recyclables in Tulsa this year.

Someone explain to me again why the economy is so bad.

[Conan71]

I still haven't heard an explanation. Aren't tax receipts a good economic indicator?

Tax receipts up, Dow up 40% under Obama, 20 plus consecutive months of private job growth...I know there are many other indicators, but these sound pretty important to me.

I don't know about other industries, but my business is way up. Recycling is up 10% across America in the last two years and we have seen dozens of new jobs created to handle recyclables in Tulsa this year.

Someone explain to me again why the economy is so bad.

I believe GDP is trending upward so technically we are not in a recession.  However, unemployment remains over 8% which is bad by any yardstick unless you are comparing it to 9% unemployment.

Really, we've bobbed along like this for awhile.  Corporate profits have been steadily rising, yet unemployment has barely inched downward.  Funny, I sense a change of message happening here.  This was evil, greedy corporatists profiting on the backs of the poor and hoarding cash just months ago.  Now the message is changing that Obama has fixed the economy!

That's a tough sell to the 14 million or so who remain unemployed.

[Gaspar]

I still haven't heard an explanation. Aren't tax receipts a good economic indicator?

Tax receipts up, Dow up 40% under Obama, 20 plus consecutive months of private job growth...I know there are many other indicators, but these sound pretty important to me.

I don't know about other industries, but my business is way up. Recycling is up 10% across America in the last two years and we have seen dozens of new jobs created to handle recyclables in Tulsa this year.

Someone explain to me again why the economy is so bad.

Because real unemployment is somewhere between 14% and 20%.  It's wonderful that receipts and corporate profits are up, but the sad part is that the recession that ended 3 years ago this month, took so much longer to recover from than any recession in history, and because of that corporations learned to operate with fewer people.  I sell ERP systems, and the primary purpose of what I sell is to automate processes and functions that people used to manage.  My business is booming, and I am happy about that, but it's not because of new companies seeking technology, it's because of old companies looking reduce risk, and the #1 risk right now is the employee.  It's insane!  No company has any idea how much Joe Blow is going to cost over the next 10 years.  Without being able to forecast that hiring will not pick up.

Unfortunately the only way to change that at this point is to reduce the risk in hiring so that it is more intelligent to increase workforce than it is to decrease it. We've come so far down the road that I seriously doubt we will ever get back to corporations viewing employees with the same value again.

So, if you want to judge the economy only based on corporate revenue and tax receipts than fine, but the average Joe is going to judge the economy based on whether he has a job and can pay his bills.  That's precisely why the president's words the other day proved a glaring example of his economic myopia.

[Townsend]

It's still Bush's fault apparently.

http://www.reuters.com/article/2012/06/14/us-usa-campaign-economy-bush-idUSBRE85D0XI20120614

About two-thirds of Americans believe Republican former U.S. President George W. Bush is responsible for the nation's struggling economy, with a smaller percentage blaming Democratic President Barack Obama, a Gallup poll showed on Thursday.

[Gaspar]

It's still Bush's fault apparently.

http://www.reuters.com/article/2012/06/14/us-usa-campaign-economy-bush-idUSBRE85D0XI20120614

That is certainly the hope that the commentators on MSNBC subscribe to.
http://newsbusters.org/blogs/mark-finkelstein/2012/06/13/mika-brzezinski-im-hoping-blaming-bush-will-work

[Townsend]

That is certainly the hope that the commentators on MSNBC subscribe to.
http://newsbusters.org/blogs/mark-finkelstein/2012/06/13/mika-brzezinski-im-hoping-blaming-bush-will-work

According to Gallup, it's a fact.  Not a hope.

[Gaspar]

According to Gallup, it's a fact.  Not a hope.

Well that should certainly help the president.  Perhaps he can shift his message back to Blame Bush.

[Townsend]

Well that should certainly help the president.  Perhaps he can shift his message back to Blame Bush.

That's the thing.  According to Gallup, he doesn't need to.  A majority of Americans blame Bush without anyone having to tell them.