Business

Trump Tax Cuts Spur Unexpectedly High State Revenues

(Photo by Oliver Contreras-Pool/Getty Images)

Daily Caller News Foundation logo
Evie Fordham Politics and Health Care Reporter
Font Size:
  • Americans are spending more because of a healthier economy and federal tax cuts that tie back to President Donald Trump’s policies, Heritage Foundation tax policy analyst Adam Michel told The Daily Caller News Foundation Thursday.
  • That spending is part of the reason why 19 states reported better-than-expected general fund revenue after reaping more in sales tax.
  • “[Trump] can also take credit for the larger economy to the extent that that’s now fueling additional spending,” Michel told TheDCNF.

The Tax Cuts and Jobs Act touted by President Donald Trump is one of three reasons that at least 19 states are reporting unexpectedly high general fund revenue halfway through fiscal year 2019, tax policy expert Adam Michel told The Daily Caller News Foundation Thursday.

“[Trump] can also take credit for the larger economy to the extent that that’s now fueling additional spending,” Michel, a Heritage Foundation policy analyst, told TheDCNF via telephone. “It’s not only the Tax Cuts and Jobs Act that’s growing the economy but his deregulatory agenda is fueling economic growth. All of those things wouldn’t have happened if he didn’t push for them.”

Increased spending in the larger economy gave state sales tax revenue a boost.

“I think we will see most states end up with more revenue at the end of the year,” Michel told TheDCNF. Heritage is a conservative think tank located in Washington, D.C. (RELATED: Ocasio-Cortez Touts New House Rule That Makes It Easier To Raise Taxes)

The current fiscal year will hit its halfway point on Dec. 30. The National Association of State Budget Officers (Nasbo) released a report Thursday that said 19 states have received general fund revenue that exceeded expectations for fiscal year 2019. Those states include Georgia, Pennsylvania, Washington and Connecticut, reported The Wall Street Journal. The latter state expects to take a $600 million chunk out of its budget gap by summer 2021 thanks to the increased revenue, reported WSJ.

Fourteen states say their revenue is meeting expectations for fiscal year 2019, while five report falling short, according to the report cited by WSJ.

U.S. House Speaker Paul Ryan gestures to President Donald Trump, flanked by Republican lawmakers, at a celebration of Congress passing the Tax Cuts and Jobs Act on the South Lawn of the White House on December 20, 2017 in Washington, DC. (Photo by Chip Somodevilla/Getty Images)

U.S. House Speaker Paul Ryan gestures to President Donald Trump, flanked by Republican lawmakers, at a celebration of Congress passing the Tax Cuts and Jobs Act on the South Lawn of the White House on Dec. 20, 2017 in Washington, D.C. (Photo by Chip Somodevilla/Getty Images)

The revenue increases are directly tied to the Tax Cuts and Jobs Act (TCJA) touted by Trump, Michel told TheDCNF.

“Because the federal tax code expanded what is taxable income — the main change being they eliminated the exclusions for individuals and children and they compensated in other areas — income that is taxable at the state level for many states went up,” he said. “So we should expect to see in a majority of states income tax revenue rise because of the changes in the Tax Cuts and Jobs Act.”

The last nationwide change that affected the increased revenue was the Supreme Court’s South Dakota v. Wayfair, Inc., ruling in June, Michel told TheDCNF. The ruling broadened the ability of states to collect sales tax from online retailers.

“The [Trump] administration also argued in front of the Supreme Court on the side of the states that were asking for the power to tax more of the online sales tax,” Michel told TheDCNF. “The federal government and the states won, so his administration also played a part in expanding that authority.”

Fiscal year 2019 predictions from the Nasbo report include 2.1 percent projected growth for general fund revenues and 7.3 percent projected growth for state rainy day fund balances. That’s compared to a “recent low” of 1.6 percent rainy day fund balance growth in fiscal year 2010, according to the report.

Nasbo reported that 26 states expect to grow their rainy day fund balances in fiscal year 2019, according to WSJ. That’s compared to 31 states that did increase their balances in fiscal 2018, according to WSJ.

States are still adjusting to the TCJA, called the largest overhaul to the tax code seen since 1986, so tax experts cannot be sure “how much of the revenue gains states have experienced of late will be recurring versus one-time,” according to the Nasbo report.

The Tax Cuts and Jobs Act of 2017 was touted as Trump’s first major legislative victory.

Follow Evie on Twitter @eviefordham.

Send tips to evie@dailycallernewsfoundation.org.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel