Don't Quit Your Day Job…

Our tax visualization last time was interesting, but this one might convey more data. Once again, or source for tax data is the IRS’s publication 2010 Data Book. Just like last time, note these are tax collections, and the IRS annual year ends in September. True revenue is after all refunds and credits are finalized, but this data is interesting to see the amount of tax collected – and how it makes it’s way to Uncle Sam.

“In this world nothing can be said to be certain, except death and taxes.” – Benjamin Franklin

What is less certain is what those taxes will be called – the tax code continues to get more and more complex every year. The IRS puts out a data report annually about their fiscal year which includes tax collections by the type of tax (Table 6). These numbers are not the final numbers – those numbers are arrived at once all credits and refunds are complete. However, the chart that results is instructive, and it allows us to visualize how the tax code has change over the years to collect revenue from the country in different ways.

In the chart that follows, you can turn off individual categories so you can see how individual categories stack up. Note the relative size of the estate and gift taxes. For the amount of interest they receive, they are an insignificant portion of total tax collections.

Carnivals and links for the week!

What would you say if someone offered you money to report your tax-evading friends? If you are staring at the screen incredulously, allow me to introduce you to Uncle Sam, who wants to make it worth your while to report on your loose-moraled tax cheat friends (and acquaintances!). If you know someone who is particularly dastardly, you could even make bank- the IRS will reward you 15% of the underpaid amount, up to a whopping $10 million!

I hope I convinced you in my earlier article you’ll soon be dealing with higher taxes. I’ve got some more slightly depressing news for you… you might be dealing with a reduction in the amount you can contribute to your 401(k) in the near future.

Yes, as Robert Powell says in this MarketWatch article, to go along with retirees not getting an increase in their Social Security payments, you may be losing some of your ability to sock away money in your 401(k). Nice.

Now up… a timely report from the Tax Foundation on corporate tax rates in select world economies. This year has seen quite a few corporate tax rates cuts in countries such as Canada and Sweden. The United States remains stubbornly high on the list of countries with the most oppressive tax regimes. In fact, the United States is number two. The only country with higher taxes is Japan, who recently gave us a new meaning to the phrase “lost decade”.