Saturday, December 24, 2005

By The Numbers

The IRS just released the December Statistics of Income (SOI) Bulletin. Previously, I had posted comments concerning Treasury Secretary Snow's abuse of statistics that he claimed showed an increase in federal tax revenues since the passage of the 2003 Tax Act. The SOI indicates that, at least for 2003, Snow's assertion was false.

According to the SOI:
Taxable income, which is the result of [Adjusted Gross Income] less exemptions and deductions, rose 2.5 percent to $4.2 trillion. However, total income tax fell 6.1 percent to $748.0 billion for 2003. . . . The decline in total income tax for 2003 reflects the reduction in tax rates, under [the Jobs and Growth Tax Relief Reconciliation Act of 2003], which lowered marginal rates above the 15-percent rate bracket and expanded the width of the 10-percent regular tax rate bracket for all returns and the 15-percent bracket for joint returns.
(Emphasis added.) In other words, in 2003, income tax revenues fell due to the Bush tax cuts.

More startling is this chart which shows the decline in tax revenue as a percent of gross domestic product:

Admittedly, the SOI analysed 2003 revenue results while Snow pointed to revenue increases in 2004 and 2005. However, the 2004 and, particularly, the 2005 results are skewed by additional changes in the tax law that distort the picture by decreasing total revenue over time, but accelerating the receipt of the revenue.

Hat tip to Tax Analysts.


Anonymous said...

Bah, Humbug.

Anonymous said...

"abuse of statistics"

No better way to put it. But we're all susceptible to this blight unless we free ourselves from the yoke of the fuzzy liberal theory of math. As a member of the Oklahoma Board of Education put it, "We simply are not confident of this mysterious process by which numbers turn, as if by magic, into other numbers".

You apparently are wedded to the belief that the prevalent theory of math is the only form of number manipulation, and this limitation makes all your conclusions suspect.