Posted on 09/14/2025 3:53:15 PM PDT by fluorescence
Tariffs are rolling into the Treasury, but there is another source of rising revenue that is proving to be just as important: the stock market.
On returns for tax year 2024 filed through mid-July, taxpayers reported $530 billion in net capital gains, up 65% from the prior year, according to new Internal Revenue Service data. The full effect of that on collections isn’t clear yet because of varying tax rates and returns that are still arriving, but there are strong signs that equity-market gains are turning into rising federal revenue.
Individual income-tax payments outside of paycheck withholding—a category that includes many capital gains realized last year—are up about 16% since January compared with a year earlier, according to the Congressional Budget Office. After adjusting for a timing shift in payment deadlines, that income-tax jump is adding more than $100 billion to federal revenue this fiscal year, about as much as the rise in tariff revenue.
The higher payments mostly reflect returns filed for 2024, CBO said.
[snip]
The data will become clearer as the final 2024 tax returns reach the IRS. Taxpayers must pay what they owe by mid-April, so payments for 2024 have largely already arrived. But people can extend tax filing until mid-October, meaning the government doesn’t yet have precise data about revenue patterns.
Many wealthy Americans wait to file, and capital gains are concentrated at the top of the income scale. More than a third of capital gains on 2024 tax returns so far went to the 0.3% of households with adjusted gross incomes above $1 million.
(Excerpt) Read more at msn.com ...
Among my elderly advice to youngsters is to develop the habit of stock market investing.
Probably 90%+ of what we do is through habit. Develop good habits.
it’s funny, i made a lot of money last month on a couple $UNH calls. of course i would never have them as insurance, investing is a different story.
There may be an alternate explanation for increased capital gains in 2024. If people need to liquidate some holdings for cash there are resultant capital gains.
I would think that the stock market may also show the decreasing value of an inflated dollar.
So, FedGov mismanages the dollar, spends printed money, and gets inflation-compensated tax returns. Not a bad gig, when you can get it.
So everyone understands. the way Newt Gingrich balanced the budget for 5 years was to just restrain federal spending while the dot com boom sent billion and billions of dollars to the federal government.
That’s essentially the plan today.
They’re not going to do much more than restrain spending. The 10 trillion dollars in investments plus the AI revolution—will send trillions to federal government coffers. There will be a balanced budge in 2 years. Maybe 3 years but I doubt it.
The first interest rate this fall will cause a melt up in the stock market.
Next year the big capital investments will come in and make the US economy grow at 4 percent and give the Trump administration the economic tail wind to keep the house and maybe increase their majorities at the rate the democrats are making themselves as stinky as they can.
The last two years of the Trump administration will be two years of really radical transformation.
But that never happened. We didn't balance the budget nor had a surplus.
Our retirement IRA’s are way up! But, each year we only take the required minimum distribution (RMD}. We feel rich, but we don’t spend rich.
If you don’t spend it, you don’t have to save it.
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