Monday, February 02, 2004

Disappearing Taxes: The $339 Billion Hole in the US Budget

It's right there, hidden in plain view. It's on Table 19-1, Chapter 19, page 329 of the detailed backup book for the new US Budget - the book with the less-than-seductive title of "Analytical Perspectives". Total US Government tax receipts in fiscal 2003 were $339 billion less than was estimated when that year's budget was being put together back in February 2002. That's 339,000,000,000.00 dollars. It's a 15% shortfall in US government revenue.

What happened? That's the curious part. "Newly enacted legislation" - i.e. the 2002 and 2003 tax cuts reduced receipts by $76 billion, of which $40 billion represented a 20% reduction in corporate income taxes. "Lower than anticipated wages and salaries" -- the difference between rosy forcasts and actual economic performance -- reduced tax collections by $62 billion. But most of the shortfall -- $201 billion dollars -- was due to "technical factors".

Technical factors?

What on earth are "technical factors"? On p. 330 the gnomelike technicians at the Office of Management and Budget explain: "This net reduction was primarily attributable to lower-than-anticipated collections of individual and corporation income taxes of $131 billion and $44 billion, respectively", which is about as meaningful as saying that unemployment is caused by people being out of work. By way of contrast, spending was "only" $78 billion above the Bush Administration forecast.

Something odd is going on. It can't be incompetence. No one can be this incompetent. Could the crop-circle paranoids be right in suspecting that the US government is now being run by and for a gang of tax cheats? Gov. Groepenegger looks like Mother Theresa by comparison.

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