Overall budget analysis of Federal Government spending, income, and resultant surplus or deficit.
Tax Reform on the Horizon
Published Monday, April 6th, 2009
In two separate events, the Obama administration has started investigating tax reform. The last major tax reform took place in 1986. President Bush appointed a tax reform commission in 2005, which delivered a report in that same year, but its recommendations were not included in the 2007 budget. Prof. Elizabeth Garret of USC, who sat on the commission, has been announced to become assistant secretary of the treasury for tax policy. Also, President Obama asked Paul Volcker, who chairs his Economic recovery Advisory Board, to appoint a tax reform task force that would report no later than December 4th.
Given the composition of tax receipts over time, the percentage of each category has changed given the reforms made by various administrations. For the 2008 fiscal year, individual tax income amounted to $1,146 billion; $23 billion lower than expected. Corporate taxes amounted to $304 billion, $5 billion lower due to $4 billion lower in payments and $1 billion in extra refunds. Social Insurance and Retirement Receipts were $900 billion, $1 billion lower than estimated. Other taxes, such as customs duties, estate and gift taxes came to $106 billion, which was $1 billion more due to higher estate taxes, gifts, fines and penalties. The overall budget in 2008 amounted to $2,979 billion, which was $36 billion above the estimate due to the Department of Defense and the Treasury.
Tax Revenue Rises in 2008 But Well Below Spending
Published Thursday, March 19th, 2009
The Release of the 2008 Internal Revenue Service Data Book details many aspects of the fiscal intake of the Federal Government, including information about returns filed, tax collections, enforcement, taxpayer assistance, the IRS budget and workforce. During the fiscal year (Oct. 1, 2007-Sept. 30, 2008) of 2008, the IRS collected more than $2.3 trillion in taxes and processed over 250 million returns. $270.4 billion was distributed through the stimulus payments. Overall, the IRS spent an average of $0.41 to collect each $100 of tax revenue; that is $94.3 million. This number is actually down since the advent of the electronic filing system, of those filed, 101 million or 58% of individual tax returns were filed electronically.
The amount of tax revenue in current dollars has just recovered its stride from the deep tax cuts—its recent low point of 1.66 trillion in 2003—that the Bush Administration imposed. The percentage of tax returns examined by the IRS has actually increased and stayed steady since 2006 at an examination rate of 1% per year. However, with the new spending by both Presidents Bush and Obama, the increased tax revenue will not meet spending for the eighth year in a row.
The Final Stimulus Package
Published Friday, February 20th, 2009
This week in Denver, the President signed the $787 billion stimulus package that streaked its way through Congress. The final bill is split into 36% for tax cuts and 64% percent in spending and money for social programs. Overall, it is $38 billion different from the original plan President Obama had introduced earlier in January. Highlights include:
• $787 billion total, $38 billion subtracted from original
• $308 billion in total spending, $142 billion subtracted (Federal Budget)
• $190 billion in Federal Aid for Education, Public Safety, Low-income, Individual and Health Care (Number of U.S. citizens below the poverty level)
• $288 billion in tax relief ($800—down from $1000—tax cuts for families, $400 tax cuts for individuals through social security payroll deductions, Business, Manufacturing, Economy, Infrastructure, Energy and other tax cuts), $13 billion added (Tax as a percentage of GDP)
• $48 billion for infrastructure, $42 billion subtracted (Spending on infrastructure)
• $90 billion Medicaid aid to states, $3 billion added (Public and private expenditures for health care)
• $53.6 billion to aid state in education, $25.4 billion subtracted
(Spending for the Department of Education)
• $44.6 billion for additional school funding to balance education budgets, prevent cutbacks and modernize schools, $3.6 billion added (Average finances by school district size and Higher education spending)
• $45 billion to encourage renewable energy production, $9 billion subtracted
(Non-Renewable v. Renewable)
• $18.6 billion for health care technology incentives and research for effective treatments, $5.4 billion subtracted (Cost per patient per day and per stay)
• $16 billion for Science/technology, equal (Research funds for science and technology)
• $15.6 billion to increase Pell Grants by $500, $0.6 billion added
Of course, this is just the combined highlights; the Stimulus and Recovery Act is well over 1,000 pages long. The administration, in an effort to become more tranparent, has set up a site in which anyone can track how and where the money is being spent: www.recovery.gov
The Stimulus Package, Before the Politicking
Published Thursday, January 29th, 2009
Last night, the US House of Representatives passed its version of President Obama’s Stimulus package. The original package-as of January 15th-before the House debated and changed the bill, contained the following provisions:
• $825 billion total
• $550 billion in new spending. (Federal Budget)
• $275 billion in tax relief ($1,000 tax cut for families, $500 tax cut for individuals through SS payroll deductions). (Tax as a percentage of GDP)
• $ 90 billion for infrastructure (Spending on infrastructure)
• $ 87 billion Medicaid aid to states. (Numbers of enrollees)
• $ 79 billion school districts/public colleges to prevent cutbacks. (Average finances by school district size)
• $ 41 billion for additional school funding ($14 billion for school modernizations and repairs, $13 billion for Title I, $13 billion for IDEA special education funding, $1 billion for education technology) (Spending for the Department of Education)
• $ 54 billion to encourage energy production from renewable sources (Non-Renewable v. Renewable)
• $ 24 billion for “health information technology to prevent medical mistakes, provide better care to patients and introduce cost-saving efficiencies” and “to provide for preventative care and to evaluate the most effective health care treatments.” (Cost per patient per day and per stay)
• $ 16 billion for science/technology ($10 billion for science facilities, research, and instrumentation; $6 billion to expand broadband to rural areas). (Research funds for science and technology)
• $ 15 billion to increase Pell grants by $500 (Rising tuition)
• $ 6 billion for “higher education modernization.” (Higher education Spending)
Obama Looks to $775 Billion Stimulus Bill
Published Tuesday, January 6th, 2009
President-Elect Barack Obama has said that there will be no backing away from a promised tax cut for the middle class and a tax hike on the wealthiest. The newest stimulus package could reach $775 billion over 2 years. This includes about $300 billion in overall tax cuts for individuals and businesses, a move aimed at attracting republicans who favor the tax cuts over more spending. The other $475 billion would go toward classrooms, libraries and labs meant to help students compete in a modern global economy; repairing aging bridges, roads and public transit systems; the computerization of healthcare records; and investments in energy sources to curb U.S. dependence on foreign oil. Furthermore, the business tax package includes write-offs for huge losses, a one year tax credit for companies who make new hires and forgo layoffs—worth $40-50 billion, and a raise in small business expenditures from $175,000 to $250,000.
Both Democrats and Republicans have reigned over deficit spending, neither can be singled out. Federal spending has out stripped income more often than not since the beginning of WWII. Recently, the budget has swung from a few years of surplus — 1998-2001 — to a continuance of overspending from 2001 to the present, reaching historic highs of $3 trillion in 2008. Receipts from taxes and other income for the federal government has remained steady, however, since World War II at a rate of 15 to 20% of the country’s GDP, which amounts to an average $100-200 billion below spending.
U.S. White House Office of Management and Budget - http://www.whitehouse.gov/omb/budget/fy2008/
Mission: to collect, analyze, publish, and disseminate information on the National Budget of the U.S. Government. These data are critical to Federal, State, and local policymakers in analyzing The federal Budget that is both efficient and evenhanded.
Tax Reform Panel - http://www.taxreformpanel.gov/
"For millions of Americans, the annual rite of filing taxes has become a headache of burdensome record-keeping, lengthy instructions, and complicated schedules, worksheets, and forms - often requiring multiple computations that are neither logical nor intuitive." The Presidents Advisory Panel on Federal Tax Reform in its final report.