Posted on 05/10/2006 2:31:01 PM PDT by libstripper
A flood of income tax payments pushed up government receipts to the second-highest level in history in April, giving the country a sizable surplus for the month.
(Excerpt) Read more at breitbart.com ...
Inflation will do that for you.
It's Bush's fault!
When is Bush going to resign?
Isn't it obvious what a bad job he is doing :)
I don't know if this is a good thing or not seeing how the Republicans are wasting so much money. I am talking about the Republicans in Congress. I am afraid they will spend the money for a new Teapot House in West Virginia or a Jazz Hall in Tampa....
You are badly fixated on reality. Tax cuts really don't work. All theory says so. /major sarcasm
:)
Betcha this doesn't make the Old Media news, or if it does, it will be accompanied by a sob story telling us how inadequate it is to alleviate some suffering or other.
Perhaps we should put a capital gains tax on those taxes.
More tax revenues just means more money for the fiscal irresponible politicos we elect to represent us in WashDC, to spend on liberal social welfare and entitlement programs. OTOH. Federal income taxes are still too high. Free Republic is a conservative website that opposes government largesse. The US economy will do even better with a smaller, more limited federal bureaucracy.
My guess is that a good portion of the increase is due to more and more people getting socked with the Alternative Minimum Tax, like me.
I set up my withholdings at the beginning of the year to make sure I'm pretty close to "net" at tax time... Over the past 5 years or so my refunds have been no more than $100 or I've had to pay a small amount.
This year I got socked with the AMT... and ended up writing a check for over $1,700. (I would have gotten a $114 refund without the AMT). Multiply this by the millions of people who got surprised this year and you have a big influx of money to the Treasury in April.
They certainly took a huge bite out of me. Biggest tax bill I have ever paid.
When the government pumps an economy full of borrowed dollars (through deficit spending), isn't it to be expected that some of those dollars will flow back into the government coffers through taxation?
I'm a rank amateur at this stuff, but it seems like the increased tax revenues could reasonably be seen as simply a reflection of increased government borrowing.
I don't see how one can feel truly good about high tax revenues unless the government is also keeping a balanced budget. Only then will you know that the taxes coming in aren't simply the government's own borrowed dollars finding their way back into its pockets.
Some of the spending dollars will definitely flow back into the coffers through taxation. However, we have something much more significant here in the great surge of tax revenues in April of 2006. That surge was mostly driven by taxes on realized capital gains, which are not simply a return of government spending, but represent real growth in the economy. Many on this thread have lamented the fact that there has been a growth in government revenue. The feeding of more spending is definitely bad; however, that's what happens whenever there's a major economic expansion, like the one brought about by Bush's tax rate cuts. Would we prefer not to have the expansion? Equally important, and the real point of my original post, is this revenue expansion shows economy stimulating tax cuts don't expand the deficit, giving the lie to the DemonRats' class war based propaganda that they do.
The AMT is definitely a factor, but not the biggest one; capital gains is the biggest one. I, too, got hit with an AMT this time, about $3,700. That was because I had the largest capital gain realization of my life and had to pay a number of times more than that $3,700 on the gain.
This experience with the AMT caused me to Google it to learn a little about how it works. The AMT rate on capital gains and dividend income turns out to be the same as the regular tax rate on those two forms of income, 15%. The basic AMT exemption for a single person is, to the best of my memory, $40,000, which is phased out at the rate of 25 cents for every dollar a single person's adjusted gross income (AGI) exceeds $107,000. Hence, even though the AMT taxes capital gains and dividends at 15%, because they are still treated as a part of AGI, realization of a substantial capital gain can significantly reduce the amount of one's basic AMT deduction, causing someone like me to have to pay it.
The other little wrinkle I discovered about the
AMT (any tax lawyer or accountant who's more familiar with the AMT than I is urged to make any appropriate additions or corrections) is that it's possible to get much of it back as a credit in later years when one is not subject to it, provided it was incurred as a result of non-recurring events like, I hope, large capital gains realizations.
...which are not simply a return of government spending, but represent real growth in the economy.
How do we *know* this? Are there any figures that can be cited to prove that this is the case?
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