Well, have you heard the news? “After three years of rising federal budget deficits, a surge of April tax receipts brought unexpected good news to fiscal policymakers — the tide of government red ink appears to be receding. The Treasury Department this week reported…” This is how much money we’re talking about. “The Treasury Department this week reported there would be a $54 billion swing from projected deficit to surplus in the April-to-June quarter, after an unanticipated gush of tax payments poured into the Treasury before the April 15 deadline. That prompted private forecasters to lower their deficit projections for the fiscal year that ends in September. Budget analysts inside and outside the government said the positive turn is likely to be short-lived… But in the short term, many forecasters said the budget deficit appears to have crested.”
All right, now, when you see this number — well, many people are going to look at this number and at this news in entirely different ways. Here’s the way I look at this. If they took in enough money in April via unexpected tax receipts, unexpected tax receipts, then we’re not talking about 95% of the American taxpayers here, because 95% of the American taxpayers probably file a 1040-E and the government knows how much money that it’s getting from all those filers because it’s withheld during the course of the year, and many of those filers, because of shoddy and lousy financial planning, actually end up getting a refund which is the dumbest thing you can do if you file your tax return in such a way. We’ve been through this. I know you like getting that big chunk of money but it’s stupid to let the government have it all year away from your use and then you get it back with no interest. But nevertheless, what this means is, if it’s unexpected, it means that there has to be a lot of quarterly estimate payers out there and filers who pay their taxes quarterly, and there must have been one hell of a great first quarter that people had to come up with. The way it works is on January 15th you have to pay your final fourth quarter installment. Then on April 15th you file your federal return, and by April 15th you have to pay what your first quarter estimated tax is. That’s what’s come rolling in here is the first quarter estimate income for this year, has to be the majority of this. I don’t mean to be insulting anybody here, but it cannot be the run-of-the-mill, ordinary, everyday average taxpayer and those of you in that category know who you are because your money cannot possibly be unexpected because your money is withheld every paycheck so they know what we’re going to get from you.
How many of you in fact have to send cash to the government when you pay your taxes? (Talking to staff.) Raise you hands. Good for you, Wendy, that’s a smart move. How about you, Mr. Snerdley? You owe money when it comes time to file your taxes? You’re almost flat every year? Snerdley is doing it right. There are probably some 1040 filers in there, 1040-E filers in there that have under-withheld wisely, and owe some money on April 15th. But still it’s stunning, they don’t know, they have no clue, this amount of money comes in and they’re stunned. They’re absolutely shocked. Now, why would this be? This has to be the representation of a pretty good economy rolling on. Yeah, a bunch of possible different explanations for it, but I mean the one big one and the fact that it’s expected has to be that economic opportunity is behind all this. (Interruption) Well, it would include the tax cuts. I think, yeah, the tax cuts do fuel growth. You know, if you read the story, it’s a Washington Post story, that fact is not in there at all. What it makes it look like to the average person is, “Well, raise taxes and you can reduce the deficit. Unexpected tax revenue.” But the problem is nobody raised taxes. Nobody raised taxes. Don’t fall for that folks, don’t think somebody raised taxes on somebody out there and all of a sudden this windfall came into the government. It’s exactly just the opposite of that.