Current US Federal Revenues Lower Now than Before Bush Tax Cuts Revenues.

A person on Facebook apparently buoyed by, well, I don't know what exactly, claimed, "[t]he Federal governments revenues are higher know than they were before the Bush Tax Cuts." We hear this a lot in some form or other. Taxes are out of control, or, the US Government doesn't need more revenue, or some variation of either or both. It's said a bit but what do the data say?

The data show that this common claim bandied about by the right is incorrect, incorrect if you actually put any thought into it.

The US FY2001 total federal receipts equalled US$2.019T; FY2010 was US$2.162T. Yes, 2.019<2.162. That much is correct. But that's not how you compare the two numbers. To compare them, you need to adjust the FY2010 figure to 2001 dollars, or the FY2001 figure to 2010, or adjust both to some third year. For simplicity's sake, let's adjust the FY2010 revenues figure so that we know what the FY2010 revenues are in 2001 dollars.

Here's how.

The buying power of the dollar has dropped by 1/3rd since FY2001 if we measure it by the US Dollar Index which I think works well for the current conditions of global capital. If instead we use the traditional measure, the Consumer Price Index, and adjust for inflation the traditional way, it's dropped by 1/4th. 67% of US$2.162T is US$1.353T; 75% of US$2.162T is US$1.514T. Of course, for those right wingers who lament the loss of the gold standard, they'd be really in trouble if we used the price of gold as a measuring stick. But I digress.

For someone to truthfully and reasonably support the claim that the US government revenue is higher now than before the Bush tax cuts you'd need to show FY2001 receipts were at least below US$1.514T and maybe below US$1.353T. Somewhere between or at least around those two numbers would be fair enough. On the basis of either of two good measuring sticks, the US Dollar Index, and the US Consumer Price Index, FY 2001 receipts were WAY higher than FY2010.

If you wanted to do FY2002 vs. FY2008 it's pretty much the same outcome. The US Dollar Index was even lower in 2008 than it is now. You can't say the dollar has weakened since Obama's arrival, because it hasn't. If anything it has strengthened a tiny bit over the period, though this current racket in congress over the debt ceiling is bringing the dollar back down to 2008 prices and will likely plunge the dollar to levels I'd rather not think about.

To recap, and simplify:

FY 2001 US Federal Revenues, in 2001 dollars: US$2 Trillion (source: OMB)

FY 2010 US Federal Revenues, in 2001 dollars: US$1.4-1.5 Trillion (estimated, based on USDX and US CPI)