Republicans have just passed the one year mark of their signature legislative accomplishment, The Big Beautiful Bill. One of the main Democratic criticisms of the BBB and the 2017 Tax Cuts and Jobs Act is that tax cuts “deprive the federal government of needed revenue.”
Given the nation’s bleak fiscal outlook, there are some who say that tax increases are inevitable and that we have no choice but to raise taxes. Democrats blame Republican tax cuts as the cause of the national debt, despite the budget-busting spending of the Biden administration. Spending has far outweighed revenues, as Washington never returned to pre-COVID spending levels even after the pandemic was over. But before lawmakers decide to take more money from individuals and businesses, they should have a clear understanding about what is currently coming in. Government can always use more money to spend, but is there any truth to the claim that revenues are suffering because of Republican tax policy?
In this 2-minute segment from our Discussion Points Podcast Episode 4 (How Much Money Is The Federal Government Taking In?), we look at revenue figures from the Congressional Budget Office. Based on revenue data available from 2017 to 2025 (from the year prior to the passage the Tax Cuts And Jobs Act through last year), here are some important stats about the state of federal revenues:
• From 2017 to 2025, revenues to the federal government increased 58%. Inflation increased 31% over that same timeframe, but revenues increased at almost twice the rate as inflation.
• Individual income tax revenue increased 67%.
• Corporate tax revenue increased 52%. With the lower corporate tax rate from the 2017 Tax Cuts and Jobs Act, US companies came home and we are seeing a remarkable increase in revenues coming from corporate taxes.
• Despite the positive trends in revenues, government spending has gone up 76% in the same time period, outweighing the benefits of the increased revenues.
Voters believe that there is much more of a spending problem than a revenue problem. From our latest numbers for Winning the Issues (May 30-June 2), government spending (79%) is overwhelmingly viewed as the bigger problem over not enough revenue from taxes (16%). The electorate believes the larger cause of the deficit is spending too much (82%) rather than taxing too little (10%).
In discussions about the debt and deficit, there is always pressure from outside groups, think tanks and Democrats for Republicans to raise taxes as the “courageous” policy choice. That question is up to lawmakers to determine, but if taxes are raised, it will have a potential negative impact on the private sector and the revenues that could be generated.
For more on the Big Beautiful Bill and Republicans’ signature legislative accomplishment of this Congress, don’t miss our full podcast episode on the BBB and what it means for the midterm elections.
