In 2000, FICA tax receipts were 65% of Income tax receipts,
In 2007, FICA tax receipts were 84% of Income tax receipts
I'm curious which two columns are you using to get 65% and 84% here. Unless you are pulling data from somewhere else, the math doesn't work. If one were to believe the figure 84% it would be a significant figure but it is clearly wrong.
The total receipts for SSA in 2006 (from the annual SSA report):
Income including interest to the combined Old-Age and Survivors, and Disability Insurance (OASDI) Trust Funds amounted to $745 billion ($626 billion in net contributions, $17 billion from taxation of benefits and $102 billion in interest) in 2006.
Medicare is an additional 5% of that figure so the figure in your table of 834 for social insurance is probably dead-on for the total FICA collected for that year, 2006.
Let's do the math for 2006. If total tax receipts for the year 2006 are 2205.67, then we take 834/2205.67= 37.8%
Over the last 18 years FICA as a percentage of total receipts has averaged 36.5% which is only .2% less than where it stands on 2009 est. and .4% less in 2007. The worst comparison is between 2000 and 2004, with 32.3% and 40.7% respectively. No where near the movement of 65% to 84% you cite. As I stated before, the last time the FICA % changed it was during the Greenspan/Congress fix and if we had to run the country on it we'd have to significantly shrink the government as well as do away with SS payments!
What has changed is that we now have a significant expansion of the EIC which acts like a negative income tax so much of what low income families pay into FICA is returned to them as a tax refund. Some 20 million households are eligible, with some phased out level of assistance all the way up to 35k in income.
Back to FICA, using the data you presented, I get amounts ranging between 32.3 and 40.7 of the years between 1992 and the year 2009 with the high and low years pivoting around the years 2000-2001 as one would expect, when we set a record for capital gains in the stock market. 2000 was an exceptional year that did have especially low percentage of FICA to total, at 32.3. I hope we never again repeat that year because significant amounts of retirement saving ended up as stock option payouts to individuals who worked for companies who didn't have a prayer of surviving and added little to the capital base.
No one could predict just how much the tech bubble and bust would add and then subtract from over all income as well as income tax receipts, but it was a significant amount. The same boom bust in income tax occurred in CA because of it, since CA was largely on the receiving end of the I-net bubble and suffered the most from the bust. |
