According to data extracted from US Census Bureau publication, tax revenues collected from both local and state governments in United States has increased by 2.2 percent to reach $294.2 billion during the 2016 third quarter. These results were calculated in the middle of Congressional Republicans planning a radical overhaul of the tax system in the United States. If this happens, it will affect families at all income levels. Businesses of all sizes will also be massively impacted.
The Republican aim is to craft a simple tax code from the present complicated one. According to the GOP, the present tax regime enables corporations to easily shift jobs and profits outside the United States and allow the wealthy to dodge taxes by employing smart accountants.
Tax collection from property also went up by 3.2 percent from $102.4 billion to $105.7 billion in the same time period. The data took into account the four biggest tax categories in local and state government corporate income, property, individual income and sales taxes.
Consumption tax and revenues
The Republican overhaul of the tax system will push a consumption tax. This may affect imports cose, including any importation of goods from neighboring Canada. Heavyweight Republicans like Speaker Paul Ryan and Mitch McConnell, the Senate Majority Leader, have pledged to pass a 2017 tax package which will not increase the budget deficit. The term for such a financial action is “revenue neutral”. The action in such a case means there will be an increase of tax for every tax slashed. This will lead to winners and losers. There would be some breathing space for lawmakers if non-partisan analysts from the Congress project a tax cut will lead to rise in economic growth. This will lead to rise in revenue, but without a tax rise.
Revenues from general sales tax went up a little from $89.6 billion to $91.8 billion- a rise of 2.5 percent compared to the identical 2015 quarter. A 2.4 percent rise was also observed in the collection of income tax, rising to $86.4 billion. Decline was however seen in tax revenues from corporate income, from 2015’s $11.5 billion to $10.4 billion- a down of 9.6 percent. There was an increase in state tax revenues from $213.8 billion to $216.8 billion, a rise of 1.4 percent during second quarter. Gross receipts, individual income and sales make up the majority of state tax revenues.