WSJ Editorial Board: Tax Revenue Keeps Rising

May 14, 2019 — Blog    — In Case You Missed It...   

Wall Street Journal

Tax Revenue Keeps Rising

By Editorial Board

May 12, 2019

The federal deficit is increasing, and the reason is spending.

You wouldn’t know it from the press coverage, but there’s some modest good news about the federal budget. The deficit is rising, but not as much as feared because tax revenues are increasing due to faster economic growth.

The Congressional Budget Office reports in its April budget review that revenues rose 2% to $2.041 trillion in the first seven months of fiscal 2019 from a year ago. Payroll tax revenue rose 4.7% due in part to rising employment and wages.

. . .

So why has the federal deficit increased by $145 billion this fiscal year to $531 billion? Because federal spending continued to rise rapidly—7% in the first seven months to $2.571 trillion. That’s $178 billion more than in the same period a year ago. As you’d expect, Social Security benefit payouts rose 6%, Medicare outlays 5% and Medicaid 4%. Anyone who thinks federal deficits and debt can be contained without entitlement reform probably still believes in the Russian collusion story.

. . .

The media blame deficits on tax reform, but the facts show the main culprit is spending. No one in the political class wants to talk about entitlements but that’s where the money is.

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