posted on Apr, 16 2014 @ 03:23 PM
reply to post by TDawgRex
Actually, considering that we've been running at a deficit for most of the past 30 years (with the exception of being the surpluses of the Clinton
era), our tax revenues have not covered our government spending in the slightest. Here's a graph I made of the federal surplus/deficit in terms of
budget based on information provided by the OMB.
Now, when I originally made that graph, I had it all the way back to the dawn of the US but that was pointless because all the way up til the 70's,
the balance hovered around 0. I have taken governmental accounting and that is actually exactly where the government should be hovering at all times.
It should not be acquiring debt or holding onto revenues (in the case of Clinton, though, it was to reduce total deficit from prior years). It's
pretty gross. Part of the reason why this is occurring is that tax revenues are actually declining.
Although the top marginal tax rate for corporations is at 35%, what is actually paid (called effective tax) by many of the large corporations is
generally 6-9% because they use things like "check the box", offshore tax shelters, corporate tax credits, and much, much more. In fact, some
companies, like Bank of America, were able to obtain a huge tax refunds after earning billions in profits due to the way that losses from prior years
can be used to offset future tax and other quirks. So all of that shenanigans that went in 2008? Well those became a "net operating loss" or NOL
that could be used to reduce future taxation. Was really a win-win in some ways. NOLs are actually one of the areas that California tried to defend
itself against by prohibiting the use of them for 2 years. They can really impact tax revenues both at the state and federal levels.
Sen. Bernie Sanders actually wrote up an overview of how much these kind of things affect tax revenues:
A few years ago, I independently compiled the difference between what some of the largest companies in the world should've paid and what they
actually paid and it was in the billions for just 8 companies. It's really quite shocking. I was motivated to do this after my tax prof informed
the class that GE had paid $0 in taxes the prior year after reporting billions in revenue. In the tax field, GE's tax accountants are called "the
greatest tax firm in the world".