Income taxes are at their lowest since 1950, their share of the total economy that is, according to AP article.
As a share of the nation's economy, Uncle Sam's take this year will be the lowest since 1950, when the Korean War was just getting under way.
And for the third straight year, American families and businesses will pay less in federal taxes than they did under former President George W. Bush, thanks to a weak economy and a growing number of tax breaks for the wealthy and poor alike.
Yet, is it fair to compare tax revenues from before the great job slaughter of the last three years? Isn't it even less fair to compare tax revenues to percentage of GDP, when more and more Americans are not sharing in the booty?
From the CBO director's blog, we can see that personal income tax revenues increased 10% from this time last year.
Receipts for the first four months of fiscal year 2011 were about $64 billion (or 9 percent) higher than receipts during the comparable period last year, CBO estimates. Nearly all of that increase was from individual income and social insurance taxes, which together rose by $60 billion (or 10 percent).
Withholding from employees’ paychecks for income and payroll taxes increased by $45 billion (or 8 percent), at least partly reflecting higher wages and salaries; the increase would have been slightly larger but for the Making Work Pay tax credit, which was in effect in 2010, and the temporary payroll tax reduction, which started in January 2011.
Nonwithheld individual income and payroll tax receipts rose by about $3 billion (or 4 percent) in the October–January period; most of that increase resulted from higher estimated payments in January for calendar year 2010 tax liabilities. Those receipts tend to move in conjunction with nonwage income.
The article quotes this statistic:
Federal tax receipts will be equal to 14.8 percent of the Gross Domestic Product, or GDP, the lowest level since Harry Truman was president. In Bush's last year in office, tax receipts were 17.5 percent of GDP, just below their 40-year average.
But wages are stagnant and the United States is still in an employment crisis, so how can one expect to collect taxes when there are way too many people out of a job, at least 25 million (U-6)?
If the government wants more revenues, first and foremost they should great jobs.
All of this is in reference to an astounding budget deficit, $424 Billion for the first 4 months of fiscal 2011 year (which is October 2010-January 2011), and before you believe the cause is social security, here is the CBO's directors breakdown:
Outlays were $57 billion (or 5 percent) higher during the first four months of fiscal year 2011 than in the same period last year, CBO estimates. But outlays in fiscal year 2010 were reduced because of substantial advance payments of insurance premiums to the Federal Deposit Insurance Corporation. Excluding the effect of those payments, total spending has grown by less than 1 percent in 2011, CBO estimates. The slow rate of growth occurred in part because expenditures for unemployment benefits decreased by $10 billion (or 18 percent), the result of fewer claims and lower average benefits. In addition, net payments to Fannie Mae and Freddie Mac dropped by $14 billion, and net spending for Medicare has risen by only about 1 percent so far this year.
In contrast, expenditures for Medicaid increased by $7 billion (or 8 percent), and net interest on the public debt was $7 billion (or 9 percent) higher, reflecting the substantial growth in the national debt over the past year. Outlays for Social Security and defense grew more slowly—by $8 billion (or 4 percent) and $7 billion (or 3 percent) respectively. Most of the increase in defense spending was for operations and maintenance. Growth in other areas, including veterans’ programs and food and nutrition assistance, was largely offset by reduced spending in areas such as refundable tax credits and international assistance.
One good thing in the article, we have some nice hints & tidbits for anyone hunting for deductions:
The poor economy is largely to blame, with corporate profits down and unemployment up. But so is a tax code that grows each year with new deductions, credits and exemptions. The result is that families making as much as $50,000 can avoid paying federal income taxes, if they have at least two dependent children. Low-income families can actually make a profit from the income tax, and the wealthy can significantly cut their payments.