Real Tax Collections per Capita, and an Invitation

Like most of us, I like to think I’m unbiased, or at least that I’ve arrived at my biases in a logical manner. In other words, I like to think that my biases are shaped by the data, and not that my interpretation of the data is shaped by my biases. I like to think I change my opinion when I see data contradicting what I believe. And I like to think I run sanity checks every so often. This post is intended as a sanity check.

I’ve had a few earlier posts that have dealt with tax issues, and those have tended to gravitate toward one of two points. One is that the data tends to show that cutting tax rates does not seem to lead to increased tax collections, and the other is enforcement affects tax collections, and that Republican administrations tend not to be big on tax enforcement. Perhaps I’m biased, but this is what I think the data shows, and I always try to summarize the data in the post as well as make my spreadsheets available.

There are always people who don’t accept the data, or at least my interpretation of the data. So to them… consider this an invitation to tell your story. Below are the percent changes per year in real taxes collected per capita between selected non-random blocks of dates.

1952 – 1960____1.41%
1960 – 1963____5.46%
1963 – 1968____4.12
1968 – 1974____1.36
1974 – 1976___-1.17
1976 – 1980____4.28
1980 – 1988____1.37
1988 – 1992____0.32
1992 – 2000_____4.46
2000 – 2005____-0.95

1952 – 2005____2.05

(Update… Correction… Note… I am embarassed. Reader M. Jed pointed out a mistake. My original figures for the growth rate under Clinton were twice as high as they should have been. I divided through by 4 years, rather than 8 for his term. Apologies all.)

(Update 2… Now I am more than embarassed… I am mortified. I should have been using the geometric mean… my original figures were just the average of the percentage changes over each President’s term.)

Please tell me how this can be interpreted to mean one or both of the following:

1. cutting tax rates encourages people to expand output which leads to each person actually paying more taxes on the average
2. Republican administrations are very diligent at ensuring everyone pays his or her fair share

Feel free to add in whatever other information you want or need to tell your story. I’m genuinely curious to see what I’m missing here.

And as always, my spreadsheets are available to anyone who wants them. (BTW… data on real tax collections comes from OMB Table 1.3. Because the fiscal year runs through Q3 of the calendar year, I divided through by Q3 population from BEA NIPA Table 7.1, which of course derives originally from the Census.)

Update… corrected annual percent change in real per capita tax collections from 1952-2005.
Update 2… corrected sentences stating that the data posted was for real GDP per capita rather than real tax collections per capita.
Update and correction. As per note above, the original growth rate posted for Clinton was wrong. Apologies!!!!