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> The surplus last month was the first since the $83 billion reported in September 2019 and the largest since the $160 billion in April 2019. April and September are traditionally months with high tax collections....

> The surplus for the month also was helped by the recognition of $70 billion in proceeds from a wireless spectrum auction, a U.S. Treasury official said.

It seems like this is a month to month number that fluctuates widely based on one-off events and things like when people typically pay their taxes.

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> It seems like this is a month to month number that fluctuates widely based on one-off events and things like when people typically pay their taxes.

Even if it varies a lot over the short-term, reaching positive numbers after a long period in the negatives would suggest an upward trend that isn't just noise.

How do you figure?

e.g. tax receipts increasing over time

so this years was bigger than the two years before (hence the biggest)

which would suggest a positive/growing trend

imagine if the number were -X billion. As I increase X, your estimate should respond. Surely there is an X such that you would notice, even though it is admitted the number varies, right? i.e. even a one-time -100000 billion month would be noticeable in your framework?

From there we show that -100 is not quite as bad, and +100 is better.

If a new employee is an hour late the first day on the job, it doesn't prove they're not committed but it sure points that way. Every observation is evidence, raising or lowering your estimates of reality behind the observations.

You can measure a long term trend, even if it's overwhelmed in the short term by much larger changes, by tracking local maxima/minima. Suppose that a circuit's voltage is either increasing or decreasing by 1V per hour, and your measurements ranging from 90V-110V. To determine the trend, you ignore the increase/decrease from one measurement to the next, and wait for it to hit 111 or 89.

$49B surplus excluding wireless spectrum auction.

Maybe a good thing. You can’t fake cashflow! You can sure fake “profit”.

Agreed, this is why periodicity is fundamental to accounting.

Spectrum licenses are hardly the furnace. No more so than the DMV recognizing the revenue from car registrations or drivers license renewals.

Spectrum auctions are one time, aren't they?

Looks like they last about 10-15 years. [1, 2]

[1] https://www.cooley.com/news/insight/2020/2020-08-06-fcc-rule...

[2] https://www.dwt.com/insights/2018/10/fcc-adopts-final-licens...

One time as in not recurring revenue for every year.

If it has to be recognised annually then roughly $70B/10-15 years is the annual value.

Interesting thing about the Trump tax cuts was that government tax revenue never declined. The year after they went into effect, Federal tax revenues were higher.

Was pretty shocked when I saw this because the corporate rate cut was huge. Perhaps offset by SALT changes

Lookup ‘laffer curve’ for the explanation. Essentially, decreasing the tax rate incentivized more participants into the market and incentivized existing participants too

For sure, I'm familiar with the concept, but wouldn't expect that effect alone to close the gap. But maybe companies actually chose to realize more gains once the rate was lowered.

Need to find a good post hoc analysis of how revenue ended up higher.

Also weird side note, Arthur Laffer is in his 80s but sounds/looks in his 60s in his interviews. Kind of amazing!

It allowed a cash out of pent up wealth that was waiting for a tax favorable environments to realize.

That likely explains part of it, but if you look at total revenues per year looks like it basically just subtracted one year of annual growth from trend.

If it was primarily due to one time realizations, you would expect a spurt shortly afterwards, followed by decline.

Any chance you have some some charts I can dig through, at hand?

Evidence of efficacy of the Laffer curve has been, to be kind about it, scant, and not for lack of looking!

The 2017 tax change pulled taxes forward from subsequent years.

The "Laffer Curve" has been widely discredited by economists across the political spectrum.

Tax revenues in the year after the the Trump tax cuts (the Tax Cuts and Jobs Act) did indeed rise (FY2018). That being said, much of that was attributable to economic growth and inflation. The real question is what would revenue have been had the TCJA not been passed? It's obviously impossible to answer a counterfactual, but the Congressional Budget Office's predictions for 2018 taxes - made before the tax cuts were passed - were $276bn higher than actual receipts. These predictions ended up being pretty close to accurate for types of taxes that weren't affected by the TCJA, so it's a good ballpark.

I agree that revenues almost certainly would have been higher without the cuts, but still pretty amazing that it seemed to only pull one year of growth from trend.

To be honest, I would have expected a much bigger decline

I understand where you're coming from, but $276bn is a pretty substantial amount of money though! I think it's also worth noting that this outcome (revenue would increase due to expected economic growth, but would end up lower than in the no-tax-cuts scenario) was correctly predicted by most of the organizations that studied the impact of the legislation.

>> Interesting thing about the Trump tax cuts was that government tax revenue never declined. The year after they went into effect, Federal tax revenues were higher.

> Lookup ‘laffer curve’ for the explanation. Essentially, decreasing the tax rate incentivized more participants into the market and incentivized existing participants too

I doubt that was what was going on there. IIRC, the "Laffer Curve" is some neat BS that's mainly useful to sell tax cuts, but all those tax cuts never resulted in the greater revenue the curve predicted.

Maybe there's some truth to the curve when effective tax rates are 90%, but that's not the world we live in.

I’m surprised at how much this got downvoted. The laffer curve is pretty intuitive. I’m not sure why there is all the hate

> I’m surprised at how much this got downvoted. The laffer curve is pretty intuitive. I’m not sure why there is all the hate

"Intuitive" does not necessarily imply "true." Some of the most pernicious false ideas are ones that have an intuitive appeal (especially in an oversimple example scenario).

The Laffer curve likely falls into something like that category. If it has any truth to it, it's in conditions that don't actually exist (like an effective 90% tax rate).

There is nothing false about the laffer curve. What is contentious is what the optimal rate is. There is no evidence that I’m aware of that says the optimal is 1% or 99%.

The Laffer Curve was a made up justification for a policy (tax cuts for wealthy people and corporations) a GOP administration wanted to implement as a favor to their political patrons. Laffer came up with it on the spot and sketched it on a napkin.

It (and “supply-side economics” in general) is not a serious economic theory.

The Laffer Curve is pretty obviously trivially a real thing, the contentious part is the parameters defining the curves and/or points in multidimensional tax policy space where the Laffer Curve hits a maximum of tax collection and where variation leads to decreases (or no change if there is a ridge maximum and the change exactly follows it.)

Well, also the usual one-dimensional presentation of the tax-policy space that goes with the curve, but that's not so much contentious as obviously wrong.

The people who think it is important tend to have a religious faith that the status quo is in a space where decrease of taxes in any aspect of tax policy moves is back toward the maximum, which, even if you accept the existence of the Laffer Curve, is a claim which needs a lot of justification which is never offered.

I find it important because the impact is pretty obvious to me. Though if I was radically anti-capitalist I might agree with you. The optimal rate could be as low as 1% or as high as 99% for all we know. I’m inclined to believe it’s much lower though because of the incentive it would provide to entry level small business owners and entrepreneurs that are even marginally familiar with how accounting works.

This is a very important place where cash accounting and accrual accounting differ, and a lesson in why it matters. Tax receipts went up because people paid up deferred tax liabilities - they took advantage of lower rates to pay taxes now rather than at a presumably higher rate in the future.

If you get paid $300 today to settle a $600 debt due next year, you haven't made yourself richer. You've essentially sold an asset at a discount.

That doesn't appear in the data though.

Surely some portion of that behavior played into the numbers, but tax receipts basically just stalled for one year, and then continued on their normal growth trajectory.

If the effect were large, you would expect a decline in revenues in subsequent years.

Or a decrease in the previous years. With how predictable US politics is, I would expect accountants to suggest holding these things until a Republican government, which will be no more than 8 years away. But looking back or forward there’s also the other effects of government on their income to confound spotting it.

You got a source for this? I looked on google but wasn't able to find anything about selling our strategic helium reserve?

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