[politics] Heritage: Biden Raised Taxes, but Tax Revenues Are Way Down This Year

[Rainstorm.]

 

Preston Brashers, Senior Tax Policy Analyst at Heritage Foundation has a new analysis on the relationship between the Biden Administration’s higher taxes, but lower tax receipts.

In 2023, despite implementing tax hikes amounting to over $60 billion, U.S. tax revenues have fallen by almost $400 billion, marking a 13% drop in tax receipts from the previous year. This unusual decline can be attributed to several factors:

Slow Economic Growth: Economic growth has slowed, leading to stagnant incomes and reduced tax receipts, especially in capital gains taxes.

Explosion of Green Tax Credits: The Inflation Reduction Act introduced numerous green tax credits, which have proven to be more costly than anticipated, potentially exceeding a trillion dollars over a decade.

IRS Regulatory Activism: The IRS expanded the size of green tax credits through regulatory interpretations, allowing for loopholes that led to a significant increase in electric vehicle sales through leases.

COVID-19-Era Employee Retention Credits (ERC): ERC, initially created for pandemic relief, has seen widespread abuse and fraudulent claims, with billions paid out long after the pandemic ended.

Flaws in Budget-Scoring Process: Budget models used by government agencies do not account for economic growth and can be mani[CENSORED]ted by lawmakers, leading to claims of deficit reduction while the national debt continues to grow.

 

The United States will sooner or later be faced with a serious reality check: the sea of debt being accumulated at a breakneck pace is not sustainable.

 

https://uspolicy.org/heritage-biden-raised-taxes-but-tax-revenues-are-way-down-this-year/