Yesterday afternoon (1/13/20), the U.S. Treasury released the last “Monthly Revenue Statement” for 2019. It shows that the most recent calendar year saw a 5.01% increase in revenues and the largest revenue year in the history of the U.S. government. This is significant because this is the first period since the Federal tax cuts took effect that their impact can be seen in the data for an entire tax year.
Likewise, Maine passed the largest tax cuts in state history back in 2011. Since then state government revenues have also risen to record levels, including eight straight years of revenue surpluses totaling more than three-quarters of a billion dollars. During that time nearly every major economic indicator for Maine has improved significantly.
Yesterday’s Bangor Daily News, published a story about the rosy outlook for Maine’s economy. In it, Bob Montgomery-Rice, president and CEO of Bangor Savings Bank said “Mainers are spending more. This last year we saw, on average, 13 percent growth in debit card transactions, both in the number of transactions and their amount.” The bottom line is, cutting taxes leaves more money in the pockets of Mainers and they spend it. Tax cuts on both the state and federal level continue to be the fundamental driver of our current economic prosperity.
Update. Maine now has the largest revenue surplus in the state’s history at $201 million so far this fiscal year. The latest revenue forecast shows the growth is almost entirely in Individual Income Tax receipts and Sales and Use Tax revenues. Mainers’ are earning and spending more money.
Update: The U.S. Treasury reports that January 2020 also saw record tax revenues. A growth of 9.5% over last January.