Thursday, June 11, 2015

Not paying Paul

I was looking for data on a whole series of years. This first graph, for the year 2010 only, is better than nothing. From the Tax Policy Center:

Oh, now wait...What is that OMB Budget Historicals thing at the bottom of the graph?

Oh yeah, Historical Tables, a page of links to Excel files. Oh yeah.

I took Table 2.2—Percentage Composition of Receipts by Source: 1934–2020, from whitehouse dot gov. Your tax dollars at work.

Thank you very much. I threw a graph together:

Graph #2: Stacked Graph Comparing Federal Revenue by Source

The purple fringe across the top is "other". The green, low-hanging fringe is "excise" taxes, something they just cut out of you, evidently. Taken together, the green and purple provided a pretty substantial portion of Federal revenue in the mid-1930s. You've probably heard that story as "protectionism" during the Great Depression.

But it makes me wonder how "excise and other" looked for a hundred years or so before the mid-1930s.

The fringe on the bottom, that bluegrass, that's revenue from corporate income taxes. We looked at that yesterday.

Everything else is taxes on labor. Well, on whatever you get your income from. Labor or profit or rent or interest, whatever. Mostly on labor, I'll venture. The orange is individual income taxes. The yellow is Social Security and stuff. It all comes out of your paycheck.

I did a little digging, to check that. Found a link to a spreadsheet that gives a breakdown of "Social Insurance and Retirement Receipts". That's the same title used in Table 2.2 for what I showed as yellow on Graph #2.

Actually you can get Table 2.4 from the same "Historicals" page where I got Table 2.2. I guess it's easier to search with Google than it is to read two more lines on a list of table names. Oh, well.

Anyway, Table 2.4 shows things like unemployment insurance, disability insurance, and old age and survivors insurance. Stuff that comes out of your paycheck when they take your taxes out, and stuff that your employer pays because you are employed. Stuff that, from the employer's point of view, is a cost associated with hiring. A labor cost.

To my mind these costs, these taxes, ought to be lumped in with our income taxes. Not always and forever. But just so we can take a gander at it.

Gander away:

Graph #3


Oilfield Trash said...


I understand the point you are making in this graph, but did you offset the SSA payments by what the employer contributes.

Not all Social insurance is paid by individuals.

Also if I remember correctly their is a cap on SSA contributions for individuals I think at $106,0000 of income. So some individuals are paying a lower percentage of SSA to their total income. This does not change the graph numbers only makes the point that all individuals do not pay the same percentage to SSA as others.

The Arthurian said...

Oilfield Trash: "... did you offset the SSA payments by what the employer contributes? Not all Social insurance is paid by individuals."

This: "The OASDI tax rate for wages paid in 2015 is set by statute at 6.2 percent for employees and employers, each."

No, I didn't subtract out the employer's share. Actually, that's what got me thinking about combining the two components. Because, to the employer, the 6.2% the employer pays feels just like labor cost. If he's gonna hire a guy for $10 an hour, it's not $10, it's $10 plus 6.2 percent. It's like paying the employee $10.62 and letting the employee pay both of the 6.2 percent taxes.

But I did have qualms, combining the two components on the graph. I think that "Social Insurance and Retirement Receipts" is purely a tax on wages. The Income Tax is a tax on wages and other forms of income. So the two don't really match up. But I wanted to see it anyway.

Jazzbumpa said...

Art -

I took a look at some of this 4 years ago.

Didn't consider the excise and other, just the taxes.