Income Tax Receipts Fell 2.6% Last Year

A reader draws my attention to a piece from Yahoo News about personal income tax payments last year:

Despite the majority of Americans receiving a tax cut, the IRS pulled in an additional $93 billion for 2018 from taxpayers on individual income taxes than it did for 2017, according to new data from the IRS. This is in part thanks to the Treasury Department processing 1.5% more individual returns for 2018 than 2017.

Huh. Did the Republican tax cut really produce more revenue? The Yahoo News reporter comes close to explaining what happened by noting that there were more returns in 2018 than 2017. As you might guess, this happens every year as the US population increases. So let’s take a look at personal income tax receipts adjusted for inflation and population growth:

In reality, income tax receipts were down 2.6 percent in 2018 compared to 2017. What this means, unsurprisingly, is that when you cut tax rates you get less revenue.

When you fail to account for things like inflation and population growth, nearly every year is an “all-time high.” But that’s meaningless. Someday our nation’s press is going to stop producing innumerate pieces on the economy and learn how to do simple adjustments that tell the real story of what’s going on. But that day is not yet.

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And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

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