Taxes

The percentage of composition of tax revenue
The percentage of composition of tax revenue  

Related "Issue of the Day" Entries

Tax Freedom Day Earlier this Year
Published Friday, April 10th, 2009

Tax Freedom Day — the first day of the year in which the nation as a whole has theoretically earned a total income equal to its annual tax burden — will arrive on April 13 this year, which is eight days earlier than in 2008 and two weeks earlier than in 2007. The reason for this early occurance is that the recession has reduced tax collections even faster than it has reduced income, and the stimulus package includes large temporary tax cuts for 2009 and 2010. Despite the extra days to ourselves, Americans will pay more in taxes than they will spend on food, clothing and housing combined. To break it down, individual federal and state taxes will require 38 days work. Payroll taxes take another 27 days, sales and excise taxes take 15 days, corporate income taxes take 6 days, and property taxes take 12. Americans will log 4 more days to pay other miscellaneous taxes and 1 day for estate taxes.

The individual taxes have been by far the largest proportion of the gross federal and state tax collection since 1944, 50.8% as of 2007. Before the Bush tax cuts, the individual tax proportion has ranged from 55.3% in 2001 to its lowest in 2005 at 48.8%. Of the other components of the tax revenue, employment taxes came to 31.6%; excise, gift and estate taxes amounted to 3%. Corporate taxes amounted to 14.7% of the total, the highest it’s been since 1978.

Posted in Taxes | No Comments »

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.

Posted in Budget, Taxes | No Comments »

Learn More

The Center on Budget and Policy Priorities: Federal Tax Policies - http://www.cbpp.org/pubs/fedtax.htm
The Center on Budget and Policy Priorities is one of the nation's premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.

Take Action

Understanding Your Money - http://www.mymoney.gov/
MyMoney.gov is the U.S. government's website dedicated to teaching all Americans the basics about financial education.