About tax receipts

All stripes of the income spectrum earned markedly less during recessionary 2008 than they had during 2007, according to newly published income tax data from the IRS. As usual during a recession, incomes shrank by larger percentages at the top of the income spectrum where sources of business income dried up. The top-earning 1 percent of tax filers were the 1.4 million tax returns out of 140 million filed who earned at least $380,354. In 2008, their share of all income was 20.0 percent, down from 22.8 percent in 2007. Their share of total income taxes paid also shrank: they paid 38.0 percent of all income taxes collected in 2008, down from 40.4 percent in 2007.(Source: The Tax Foundation)

Tax receipts as percent of GDP have been declining since 1998 (click on the chart to enlarge it). But we keep spending more. Don't you agree that something has to give?

My sense is that we should be worrying about growth and generating wealth, Then we can tackle how to finance the grand social programs. But what do I know!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

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