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The Trump Tax Cuts Have Been Approved By The Congress: Will the Deficit Increase By The $1.5 Billion Estimated And Will The Individual Tax Reductions Expire in 2025?

December 21, 2017
ArmchairPoliticianTaxCuts, Brad Peery, ArmchairPolitician.US

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The fiscal 2017 fiscal results are that taxes of $3,315 billion were collected, up 1.5% from fiscal 2016. This was well below the 5.1% increase forecasted by the Obama administration.

Corporate taxes in fiscal 2017 were $297 billion, or 8.96% of collections. The overall corporate tax rate should have been about 35%. The tax bill that passed in December, 2017 lowered that rate to 21%. If corporate taxes would have grown 5% in 2018 without the tax reduction, with the tax reduction corporate tax receipts should be about $187 billion in 2018, a 37% decline. Far larger are employee payments that corporations are required to pay.

There was discussion about reducing personal tax brackets to 3 from seven, but seven tax brackets were retained in the Trump tax reduction bill.

Individual taxes in fiscal 2017 were $1,587 billion, or 47.9% of receipts. This was a 2.65% increase. There are 100 million households, so the average household tax payment was about $1,587 per household.
A further discussion is:
Income Overview
• Income from individual income taxes in 2017 was about 47.9% of all receipts in fiscal 2017. This is above the average when compared to receipts from other years (average proportion = 45%).
• Social insurance and retirement receipts were $1,162 which was 35.1% of all receipts in fiscal 2017. This is greater than average when compared to receipts from other years (average proportion = 30%). Social insurance and retirement receipts are taxes that employers are required to pay when they pay their staff their salaries, plus payroll taxes paid by employees.
• Corporate income taxes were 9.0% of all receipts in fiscal 2017. This is less than average when compared to receipts from other years (average proportion = 14%). Corporate income taxes are imposed at the federal level on all entities treated as corporations.
ArmchairPolitician.US Opinion: The above analysis provides an assessment of government budget results for Fiscal 2017. When the revised Trump budget for fiscal 2018 is released, we will be in a position to assess the impact of the 21% corporate tax cuts and the tax reductions for individuals, and judge the impact tax reductions might have on the deficit. Of major importance will be the inflation rate assumed (2%?) and the economic growth rate forecasted (over 3%). For the purpose of getting approval for the bill under Senate Rules, the deficit was estimated to be $1.5 billion. The personal tax reductions are set to expire in 2025, but the corporate tax reductions are permanent. The argument is that the 21% corporate tax rate will make U.S. companies competitive with the 23% average corporate tax rate internationally.

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