{"id":10376,"date":"2020-08-03T09:12:18","date_gmt":"2020-08-03T14:12:18","guid":{"rendered":"http:\/\/blog.uwsp.edu\/cps\/?p=10376"},"modified":"2020-08-10T10:57:25","modified_gmt":"2020-08-10T15:57:25","slug":"the-economic-recovery-2010-19-what-changed-and-what-didnt-part-5-funding-the-u-s-government-corporate-vs-individual-taxes","status":"publish","type":"post","link":"https:\/\/blog.uwsp.edu\/cps\/2020\/08\/03\/the-economic-recovery-2010-19-what-changed-and-what-didnt-part-5-funding-the-u-s-government-corporate-vs-individual-taxes\/","title":{"rendered":"The Economic Recovery 2010-19: What Changed and What Didn\u2019t \u2013 Part 5: Funding the U.S. Government \u2013 Corporate vs. Individual Taxes"},"content":{"rendered":"\n

During the economic recovery the split\nbetween how individual and corporate taxes comprised total federal tax revenues\nchanged, primarily as a result of the 2018 federal tax changes. Before we\nreview what happened in the last decade during the economic recovery, a\nlong-term view of what has changed.<\/p>\n\n\n\n

Chart 1 below shows the percentage\ncomposition of federal tax receipts that corporate and individual income taxes\nprovided to the U.S. government over a 50-year period, from 1960 through 2019. (Other\ntax revenue sources for the federal government include Social Security taxes\nand excise taxes.) Since 1960, there has been a general decline in the\npercentage of federal tax receipts that corporate income taxes have provided.\nIn 1960, corporate income taxes provided 23.2% of federal income tax receipts;\nthe number has generally declined ever since. In the 1970s, the highest\npercentage of federal tax receipts provided by corporate income taxes was 17.0%\nin 1970. The decline continued in the 1980s, with the percentage of federal tax\nreceipts provided by corporate income taxes at a decade high of 12.5% in 1980.\nIn the 1990s, 11.8% was the decade high in 1996. A reversal occurred after the\nturn of the century, with the percentage of federal tax receipts provided by\ncorporate income taxes hitting a decade high of 14.7% in 2006.<\/p>\n\n\n\n

The trend for individual taxes as a percentage of federal tax receipts has fluctuated but generally increased since 1960. Between 1960 and 1999 the rate fluctuated with the lowest percentage of federal tax receipts provided by individual taxes at 41.3% in 1967 and the highest at 48.2% in 1982. In 2001 the percentage of federal tax receipts comprised by individual taxes rose to 49.9%, a high for the decade.<\/p>\n\n\n\n

Chart 1: Percentage of U.S. Federal Tax Receipts \u2013 Corporate vs. Individual Income Taxes <\/strong>(1960-2019<\/strong>)<\/p>\n\n\n\n

\"\"
Source: U.S. Office of Management and Budget<\/em><\/figcaption><\/figure>\n\n\n\n

Table 1 below shows the percentage composition of federal tax receipts that corporate and individual income taxes provided to the U.S. government over the last decade during the economic recovery.<\/p>\n\n\n\n

Table 1: Percentage of U.S. Federal Tax Receipts \u2013 Corporate vs. Individual Income Taxes <\/strong>(2010-19)<\/strong><\/p>\n\n\n\n

\"\"
Source: U.S. Office of Management and Budget<\/em><\/figcaption><\/figure>\n\n\n\n

In fiscal year 2018, corporate\nincome taxes comprised 6.1% of federal tax revenue. The 6.1% rate was not only\nthe lowest<\/em> of the decade, it was the lowest rate ever based on Office of\nManagement and Budget data available since 1934. Conversely in fiscal year\n2018, the contribution of individual income taxes to total federal tax revenue\nincreased. Federal income tax revenue from individual income taxes comprised\n50.6% of federal tax revenue in fiscal year 2018. The 50.6% rate for individual\nincome taxes was not only the highest<\/em> of the decade, it was the highest\nrate ever based on Office of Management and Budget data available since 1934.<\/p>\n\n\n\n

During the economic recovery, the\nsplit between how individual and corporate income taxes comprised total federal\ntax revenues changed significantly, with the percentage of federal tax revenues\nincreasing for individual income taxes and decreasing for corporate income\ntaxes. In 2007, generally before the effects of the financial crisis,\nindividual income taxes provided 45.3% of federal tax revenues while corporate\nincome taxes provided 14.4%. Those numbers changed significantly during the\neconomic recovery. In 2019 the percentage of federal tax revenues provided by\nindividual income taxes grew to 49.6%, while corporate income taxes declined to\nonly 6.6%.<\/p>\n\n\n\n

For further information:<\/strong>
From the Office of Management and Budget, tax revenue by source (see Tables 2.1 and 2.2): https:\/\/www.whitehouse.gov\/omb\/historical-tables <\/a><\/p>\n\n\n\n

\"Economic<\/figure><\/div>\n\n\n\n

CBEI Series: The Economic Recovery 2010-19: What Changed and What Didn\u2019t<\/strong>
Part 1: Overview<\/a>
Part 2: Wealth Distribution<\/a>
Part 3: Manufacturing Employment<\/a>
Part 4: Trade with China \u2026 and the Rise of Vietnam<\/a>
Part 5: Funding the U.S. Government \u2013 Corporate vs. Individual Taxes<\/a>
Part 6: Corporate Debt and Collateralized Loan Obligations<\/a><\/p>\n\n\n\n

\"Kevin<\/figure>
\n

Kevin Bahr is a professor emeritus of finance and chief analyst of the Center for Business and Economic Insight<\/a> in the Sentry School of Business and Economics at the University of Wisconsin-Stevens Point. <\/p>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

During the economic recovery the split between how individual and corporate taxes comprised total federal tax revenues changed, primarily as a result of the 2018 federal tax changes. Before we review what happened in the last decade during the economic recovery, a long-term view of what has changed. Chart 1 below shows the percentage composition […]<\/p>\n","protected":false},"author":136,"featured_media":10292,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,7,527,12],"tags":[547,124,532,305,502,343,344],"_links":{"self":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/10376"}],"collection":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/users\/136"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/comments?post=10376"}],"version-history":[{"count":6,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/10376\/revisions"}],"predecessor-version":[{"id":10404,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/posts\/10376\/revisions\/10404"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/media\/10292"}],"wp:attachment":[{"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/media?parent=10376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/categories?post=10376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.uwsp.edu\/cps\/wp-json\/wp\/v2\/tags?post=10376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}