I'll settle for federal income tax at that rate [8%], but through the argument I developed it would have logically meant all taxes.
I hadn't expected you to be so easy....<s>
Due to a minor point of availability of information for 2000, I'll use 1999 as the sample year...
From Table 8.28. Comparison of Personal Income in the National Income and Product Accounts (NIPA's) with Adjusted Gross Income as Published by the Internal Revenue Service (IRS) bea.doc.gov
On line 1, we've got NIPA's amount for personal income, in 1999 which is $7,777.3B.
From Table 3.2. Federal Government Current Receipts and Expenditures [Billions of dollars] bea.doc.gov
On line 3, Personal, Income Tax is $894.0B
If I calculate that as a percentage, that gives me a rate of ~11.49%
3.5% to go.
Returning to the last table, draw your attention to Line 18, Grants-in-aid to State and local governments = $230.5B
I draw your attention to this line because line 18 has always been a pet peeve of mine, the States get the Feds to collect their taxes and then let the Feds take the blame for it.
So let's zap that out and give the benefits directly to personal income taxpayers. If the States really need that money they can collect it directly on a State sales tax, property taxes, State Income tax. I don't care. It's a State problem.
So If I give a dollar for dollar reduction in personal income tax for the savings on Grants-in-aid to State and local governments that gives me a necessary tax revenue of $894.0B - $230.5B = $663.6B
Which would result in a computation of [$663.6B/$7,777.3B]*100%= 8.53%
I'm sure we can find a half a penny somewhere else.
If we were to take a look at Line 19 of the same table, we would notice that the Net interest paid of $263.9B is greater than all the payments made to States and local governments. Shame that we racked up all the debt in the 80s and 90s.
To get that 0.5% all we need is about $40B. Should be a piece of cake.
Of course adjustments need to be made for the current fiscal year, there was already a tax reduction given and we're back into deficit spending. But that's the status in 1999.
Edit: Please check all items for transpositions, grabbing the wrong line, and errors in computation. We'll call it peer review.
jttmab |
