Where Uncle Sam gets his money
By Dian Vujovich
Funny thing about money and our Gross Domestic Product (GDP). Read only the total dollar amounts and you’ll get a sense of how much comes from where. But, follow the percentages and the picture doesn’t look quite the same.
With clearly too much time on my hands, last week I read through a few of the August Congressional Budget Office and Office of Management and Budge spreadsheets. The one that caught my eye was the “Revenues by Major Sources, Since 1973” spreadsheet.
The revenue sources listed on that page included: Individual income taxes; corporate income taxes; social insurance taxes; excise taxes; estate and gift taxes; customs dues; and miscellaneous receipts. Dollar amounts, in the billions, were given for each year under their heading. Percentages showing how those dollars translated into percentages followed the dollars chart.
Here a bit of what I found interesting:
• Individual Income Taxes. In 1973, $103.2 billion in income taxes was collected. In 2012, the figure was almost 10 times higher at $1,322.2 billion. But as a percentage of GDP, individual income taxes accounted for 7.6 percent of it in 1973 and only 7 percent in 2012. Taxes had been as high as 9.9 percent of GDP in 2000 and as low as 6.1 percent in 2010.
•Corporate Income Taxes. These taxes amounted to $36.2 billion in 1973 and $242.3 billion in 2012. Or, 2.7 percent of GDP in ’73 and 1.5 percent of our Gross Domestic Product in 2012. The lowest rates reflecting 1 percent of GDP were in 1983 and 2009.
•Gift and Estate Taxes. Uncle Sam collected $4.9 billion in estate taxes 40 years ago and $14 billion in 2012. That was 0.4 percent of our GDP in 1973, only 0.1 percent last year and 2011 was a gimme as no estate or gift taxes were collected in that year.
•Finally, the grand total. Everyone knows wealthy Americans are hugely wealthier now than almost ever before while the numbers of poor swell by the minute and that the middle class has pretty much gone bust. But I bet you didn’t know that in 1973, monies from all of those seven sources of revenue amounted to 17 percent of our GDP and in 2012 it was less— 15.2 percent.
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