Reckless and runaway spending in recent years has directly contributed to 40-year high inflation that has led to a skyrocketing cost of living that is costing and negatively impacting most Americans.
Our friends at the Tax Foundation point out another development from 8.3 percent inflation: in addition to inflation surging, so are federal tax collections. We’ll let them explain.
“While not part of the CPI, another measure of inflation (call it the Taxpayer Price Index?) is also surging: federal tax collections are up 23 percent over the last year, according to the latest data from the Congressional Budget Office (CBO). At the current pace, federal tax collections will reach a record high of about $5 trillion in nominal dollars for the fiscal year (FY) 2022 ending September 30, which is about $1 trillion more than last year’s $4 trillion in collections (also a record)…
“It remains to be seen where tax revenue will go from here, but it clearly depends on the direction of the economy and inflation—and how potential policy changes affect both. This highlights the need for policymakers to at least try to account for these effects when weighing various policy trade-offs.
“Furthermore, policymakers should seriously consider giving taxpayers a break, both in terms of taxes and spending. Record federal tax collections on top of surging prices – essentially an additional inflation tax paid by everyone who uses dollars – should not be used as a justification for more spending. Indeed, excessive spending in response to the pandemic is driving inflation, and rather than ramping up expensive relief programs (e.g., student loan forgiveness), we should be winding them down. Taxpayers should demand that pandemic emergency spending end now that the pandemic emergency is over, and that their tax dollars be used more judiciously or returned to them.”
Read their entire report here.
