Jesus & Reading Economic Sign Of Times

Pandemic panic peddling drove huge capital gains that filled gov’t tax coffers, but WSJ warns of “The Coming Tax Revenue Reckoning” as those gov’t windfalls are going to be “Gone With the Wind” as 2022 losses roll in tax day.

As the editorial board notes, “Politicians [as usual] aren’t ready as signs point to budget trouble ahead.” The cause and effect they see is this: “The federal and state governments have had a good pandemic, enjoying the gusher of tax revenue and federal largesse. But those fat years are about to end, and the political class is most places isn’t ready for it.” As Jesus had chastised His followers about the coming Kingdom: “You know how to read the appearance of the sky, but you can’t read the signs of the times.”

As the WSJ editors read today’s economic signs for us: “The latest evidence [of a big downturn in gov’t coffers] came this month in the federal revenue news for October and November, the first two months of the 2023 fiscal year. Revenue rose only 1%, in contrast to an 21% increase in all of fiscal 2022. Individual taxes rose 4% but corporate tax revenue fell 6% and other revenue fell 21%.” A similar tale is related on the 50 States. Yet, again, “All of this was predictable since the good times were kept afloat by easy money and a highly progressive tax code. Federal tax receipts as a share of GDP hit a near record 19.6% in fiscal 2022 and Congress spent it like it would never end. Well, it always does, and that is before the widely predicted recession in 2023.”

Davd Soul