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To: Steve Dietrich who wrote (42485)	3/28/2001 6:11:24 PM
From: Peter O'Brien	Read Replies (1) \| Respond to of 64865

>Taxable incomes have risen as a share of GDP because of the effects >of a rising stock market. I have already disproven this assertion, yet you continue to make it! In 1994, capital gains tax receipts were 7% of total individual income tax receipts. Consider that the "baseline". In 2000, capital gains tax receipts rose to 12% of total individual income tax receipts. So, the net effect is that "unusually large" capital gains tax receipts in recent years are only responsible for a 5% boost in the total individual income tax receipts. If you don't believe me, my source is the CBO: cbo.gov see Table 3-6. As a percentage of GDP, individual income tax receipts were a record high 9.9% in 2000. If you reduce this by 5% to offset the effects of "unusually large" capital gains, you are still left with 9.4% which is the highest since WW2. If you don't believe me, my source is the OMB: w3.access.gpo.gov see pages 35-36. Now, do you still assert that capital gains tax receipts are "in large part" (your words) responsible for the current all-time high level of federal taxation?

To: Steve Dietrich who wrote (42485)	3/28/2001 6:46:29 PM
From: Peter O'Brien	Respond to of 64865

Another quote from the same CBO source: cbo.gov "The most significant source of the growth of income taxes relative to GDP was the increase in the effective tax rate. In tax years 1995 to 1998, increases in the effective rate (on income other than capital gains) accounted for more than 40 percent of the growth of liabilities in excess of the growth of GDP. Increases in real income for taxpayers generally placed more income into higher tax brackets. That phenomenon alone accounted for more than half of the increase in income tax liabilities relative to GDP that resulted from the rise in the effective tax rate."