Tax Receipts Flash Economic Warning Sign
by Lance Roberts
ZeroHedge.com
04/20/2015
With “tax day” now firmly behind us, it is expected that 2015 will show a record level of tax collections. This is a good thing, right? Maybe not.
Over the weekend, an economist friend of mine sent me an interesting piece of analysis discussing the record level of tax receipts as a percentage of the economy. This is something that I have written about in the past.
While the current push higher in tax collections partially due to economic growth, it is primarily due to higher tax rates brought on by the “2011 Budget Control Act.” That bill imposed automatic tax increases and spending cuts beginning in 2013. It is worth noting that then chairman of the Federal Reserve, Ben Bernanke, launched “QE 3” specifically to offset the potential risks of the “fiscal cliff” imposed by the “debt ceiling deal.”
The good news is that those tax increases and automatic spending cuts led to a massive shrinkage of the deficit which has declined from a record of $1.35 Trillion in 2010 to just $559 billion as of the end of 2014.
The Rest…HERE
