INCOME TAX REVENUE UP 76 PERCENT; U.S. GOVERNMENT ENJOYED INCREASE OVER PAST 7 YEARS

The nation's booming economy has paid huge dividends for the federal government in income tax revenue.

The government has seen its net income tax revenue climb by 76 percent in seven years, from $576 billion in fiscal 1992 to over $1 trillion in fiscal 1998, which ended Sept. 30.

Individual income taxes netted Washington more than $828 billion last fiscal year, a nearly 74 percent jump from fiscal 1992 when the government collected more than $476 billion.

Corporate income tax revenue rose 88 percent during the same period, from just over $100 billion to more than $188 billion, according to U.S. Treasury Department financial reports.

The Southeast Missourian obtained the Treasury Department records from U.S. Rep. Jo Ann Emerson's office.

Emerson told a luncheon meeting of the Cape Girardeau Rotary Club on Monday that the average American pays 63 percent more in taxes than he or she did in 1992.

But Emerson spokeswoman Kris Kruger later said that the 63 percent increase referred to income tax revenue received by the federal government from fiscal 1993 to fiscal 1998. Kruger said that statistic was based on the Treasury Department's monthly financial reports.

Two Southeast Missouri State University economists aren't surprised by the growth in tax revenue.

"The economy has been booming the last seven years," said Dr. Bruce Domazlicky, director of the Center for Economic and Business Research at Southeast.

Fellow economics professor Dr. Terry Sutton agreed. "So many people have jobs," he said.

Both Sutton and Domazlicky said this has been one of the longest periods of prosperity in the nation's history.

The nation's last recession ended in 1991.

Increased prosperity for Americans means more tax money for Uncle Sam.

In 1992, individual income taxes amounted to 9 percent of personal income. By 1997, that figure had increased to 10.7 percent. Domazlicky estimated the percentage for 1998 at 11.5 percent.

That doesn't include Social Security taxes, which amounted to 7.84 percent of personal income in 1997 and an estimated 7.85 percent in 1998, Domazlicky said.

When Social Security taxes -- both the employer and employee shares -- are included, the tax bite is close to 20 percent of personal income.

Corporate income taxes, as a percent of profits, fell from 33.8 percent in 1992 to about 30.7 percent in 1997, Domazlicky said.

He attribute the decline largely to increased depreciation write-offs. He said that occurred because companies bought more capital goods and expanded during the good economic times.

Except for the capital gains tax cut of 1997, Congress hasn't cut income tax rates in the past seven years, according to the Congressional Budget Office.

Sutton said taxes are still too high.

For every $1 raise he receives, 32 cents is taken up by state and federal income taxes, Social Security and Medicare, Sutton said.

Still, the economy continues to charge ahead.

"The country is booming right now in spite of high taxes," he said.

As a result, he said there is less political incentive to cut taxes.

Sutton said the good economic times are partly due to the monetary policies of the Federal Reserve and its chairman, Alan Greenspan.

"I always tell my classes that the president is nobody. It is the head of the Federal Reserve that is the most powerful person in the country," said Sutton.

As long as the economy remains healthy, federal income tax revenue will continue to climb, said Sutton.

"It is when recession occurs that revenue goes down," he said.

For now, there's no talk of recession. Like the economy, federal tax revenues continue to grow.