re:"Tell me, in dollars, how many dollars of taxes were actually cut from aggregate personal income taxes in, say, 2001 or 2002. You'll have to subtract out the recession effect, that is to say, less income, less tax owed."
O.k. Here are my quick and dirty numbers (the analysis may be lousy, but it is mine - based off of BEA numbers). These next numbers do not account for inflation, but here we go....
In 1999 the GDP was $ 9,268 Billion
In 2000 the GDP was $ 9,817 Billion +5.9%
In 2001 the GDP was $10,101 Billion +2.9%(recession Mar-Nov)
In 2002 the GDP was $10,481 Billion +3.8%
Three largest components of GDP are personal consumption expenditures, private investment (purchase of buildings, equipment and software,...), and government consumption and expenditures.
Personal Consumption Expenditures (PCE) component of GDP
In 1999 the PCE was $6,282 Billion
In 2000 the PCE was $6,739 Billion +7.3%
In 2001 the PCE was $7,045 Billion +4.5%
In 2002 the PCE was $7,385 Billion +4.8%
Note that personal consumption continues to increase despite recession and slow recovery.
Gross Private Domestic Investment (or GPDI) component of GDP
In 1999 the GPDI was $1,559 Billion
In 2000 the GPDI was $1,679 Billion +7.7%
In 2001 the GPDI was $1,643 Billion -2.1%
In 2002 the GPDI was $1,584 Billion -3.6%
Note that private investment increases roughly the same as personal consumption in 1999-2000, but decreases in response to recession and continues to decrease despite economic "recovery" and lowering interest rates while personal consumption continues to increase.
Taxes and tax cut
Individual and Household Federal income taxes (total Federal income taxes)
In 1999 Federal income taxes for individuals was($1,111) $ 899 Billion
In 2000 Federal income taxes for individuals was($1,226) $1006 Billion +11.9% (+10.3)
In 2001 Federal income taxes for individuals was($1,166) $1002 Billion - .4% (-4.9%)
In 2002 Federal income taxes for individuals was($ 988) $ 837 Billion -16.5% (-15.3)
Decrease in Federal income taxes in 2001 is a result of taxcut and recession
Decrease in Federal income taxes in 2002 is also a result of the recession and tax cut.
I have included State Income taxes for Individuals and Households as a control to compare to the Federal tax cut (total State income taxes collected)
Assumption-very few or no states reduced income tax rates in response to the Recession of 2001 (recession in 2001 reduces income taxes collected in 2002).
In 1999 State income taxes for individuals was ($211) $178 Billion
In 2000 State income taxes for individuals was ($232) $199 Billion +11.8 (10.0%)
In 2001 State income taxes for individuals was ($233) $206 Billion + 3.5% (+0.4%)
In 2002 State income taxes for individuals was ($213) $184 Billion -10.7% (- 8.6%)
Note that the increase in 1999-2000 Federal and State taxes collected are almost identical 11.9% vs. 11.8% or (10.3 vs 10.0). So a comparison of Fed vs. State income taxes show that in the first year of the tax cut (2001), Federal income tax collected drops 4.9% while State Income taxes increase 0.4% - sooo a quick and dirty, rough guess based on this difference, means the tax cuts resulted in a reduction of about $70 Billion for the Federal Government in 2001 and $80 Billion in 2002 (or $150Billion in 2002 if there were no tax cut).
Comparison of 2001 recession and 1991 recession I will use Chained (2000 dollars) statistics - so as to account for the possible difference in inflation rates
In 1991, REAL GDP growth was -.2%
personal expenditures increased .3%
prime rate fell from 10% to 6% between 1990-92
52week T-Bills fell from 8.7% to 3.1% (1990-92)
In 2001, REAL GDP growth 0.5%
personal expenditures increased 2.5%
prime rate fell from ~9.4% to 4.7% in 2000-02
52week T-Bills fell from 6.375% to 1.4% (2000-02) |
