Posted on 07/29/2004 6:21:43 AM PDT by FoxPro
The overall income Americans reported to the government shrank for two consecutive years after the Internet stock market bubble burst in 2000, the first time that has effectively happened since the modern tax system was introduced during World War II, newly disclosed information from the Internal Revenue Service shows.
The total adjusted gross income on tax returns fell 5.1 percent, to just over $6 trillion in 2002, the most recent year for which data is available, from $6.35 trillion in 2000. Because of population growth, average incomes declined even more, by 5.7 percent.
Adjusted for inflation, the income of all Americans fell 9.2 percent from 2000 to 2002, according to the new I.R.S. data.
While the recession that hit the economy in 2001 in the wake of the market plunge was considered relatively mild, the new information shows that its effect on Americans' incomes, particularly those at the upper end of the spectrum, was much more severe. Earlier government economic statistics provided general evidence that incomes suffered in the first years of the decade, but the full impact of the blow and what groups it fell hardest on were not known until the I.R.S. made available on its Web site the detailed information from tax returns.
The unprecedented back-to-back declines in reported incomes was caused primarily by the combination of the big fall in the stock market and the erosion of jobs and wages in well-paying industries in the early years of the decade.
In the past, overall personal income rose from one year to the next with relentless monotony, the growth rate changing in response to fluctuations in economic activity but almost never falling.
But now, with many more ordinary employees joining high-level executives in having part of their compensation dependent on stock options and bonus plans, a volatile and relatively unpredictable new element has been introduced to the incomes of millions of workers.
"Risks used to be confined largely to executives and business owners with large incomes,'' said Edward N. Wolff, an economist at New York University who studies wealth and income.
"But now for many people with more modest incomes their earnings are more volatile,'' Mr. Wolff added, leaving them more vulnerable to losing pay they count on to meet regular expenses like mortgage payments, car loans and day-to-day living costs.
(Excerpt) Read more at nytimes.com ...
Maybe the overall tax revenue would increase if 32,000 Georgia state employess wouldn't have "neglected" to file tax returns. I wonder how many liberals didn't pay their fair share of taxes in '03?
3 years of recession will lead to income shrinkages and fewer jobs... thanks again Bill.
That's funny, I find just the opposite to be true.
WEll at least he CEOs are taking care of themselves with an average of a 15% pay raise in the last year.
FMCDH(BITS)
Of course you would never see a headline from the NYT, "Middle class gains in income".
Wait, the last column of that graph says that rich got poorer and the poor got richer in 2000-2002. The 'Rats should be dancing in the streets about this economy - it's what they've been demanding for 75 years.
Did they adjust for the Bush tax cuts? I'm sure that had a negative effect on the IRS's bottom line.
There are plenty of straight-commission jobs out there. If you can make cold calls, you'll make a good chunk of money.
"I think this is BS..."
You can remove your head from the sand (or some body oriface) anytime now. Trying to present an argument by stating the beginning premise BS will get you nowhere in a hurry. Accept the fact and then find a way to lessen the impact.
This will be another 'big gun' the dems will use against B/C '04 and has the potential to be related to that poor woman sitting at the kitchen table mentioned last night in Boston.
Oh really?
The reduction in reported income from 2000-2002 is entirely attributable to those taxpayers who earn more than $200,000.
This does not take into consideration the years 2003 and 2004.
Maybe the IRS has been unaware of the "underground economy" that bypasses their watchful(?) eyes.
Here is the crux. We're making plenty of money. We're just reporting less of it to you schmucks at the IRS!
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