Harry Always Wants More
February 4 | Posted by mrossol | Tax Issues, The LeftThe man who runs the U.S. Senate gave a rare interview on Sunday, but his message was familiar: Before they reduce spending, Democrats want still another tax increase. Majority Leader Harry Reid told ABC’s George Stephanopoulos that a tax increase is also his price for adjusting the terms of the automatic spending cuts scheduled to hit on March 1.
Republicans would have to be suicidal to agree, all the more so after the tax increases that struck on January 1. They include increases in income tax rates, a two-percentage point payroll tax increase, higher rates on capital gains and dividends, and the long list of new ObamaCare levies. As early as this week we’ll get an idea of how much all this will lift revenues in 2013 when the Congressional Budget Office releases its January budget report.
But we already know that revenues were rising smartly at the end of last year even before the tax increase. According to CBO’s report for December, which hasn’t received much attention, individual income tax receipts were up $42 billion during October-December, or a whopping 15.6% from those three months in the previous year. Overall receipts rose nearly 11%.
CBO attributed the increase in part to “an acceleration in the payment of some compensation” into calendar 2012 from 2013 “because people were anticipating higher tax rates.” Federal revenues have been at low levels since 2009 because of the historically slow recovery, but they should come back to 18%-19% of GDP with any kind of normal growth. It’d be nice if Harry and the Democrats waited to see, but their tax appetite is voracious.
A version of this article appeared February 4, 2013, on page A12 in the U.S. edition of The Wall Street Journal, with the headline: Harry Always Wants More.
Review & Outlook: Harry Always Wants More – WSJ.com.
New taxes + increased taxes = continued failed economy.