(TheLibertyRevolution.com)- According to a recent analysis by the Tax Foundation, citing statistics from the Congressional Budget Office, tax collections in the United States this year are up 23% from last year. There appears to be inflation everywhere.
After reading The Tax Foundation’s report on soaring IRS collections, you could ponder what might happen if even more resources were allocated to IRS collections.
Overall, the Consumer Price Index (CPI) is up 8.3% over the previous year, but some individual percentages are far worse. Consider the increases in food (11.4%) and energy (23.8%) as examples. However, it appears that American earnings have increased as well.
Although federal tax collections are not included in the CPI, they appear to be overstated as well, rising 23% over the previous year, per the Congressional Budget Office (CBO). If things continue as they are, federal tax receipts for the fiscal year (FY) 2022 that ends on September 30 will hit a new high of almost $5 trillion in nominal terms, which is about $1 trillion higher than the $4 trillion in receipts for the previous year (also a record).
Notably, the most significant increase in tax revenue came from individual taxpayers, who saw their receipts jump 32% from $1.8 trillion to $2.4 trillion this year.
While corporation taxes increased 12% from $285 billion to $319 billion, payroll taxes increased by 14% from $1.2 trillion to $1.4 trillion.
From $281 billion to $328 billion, other revenues have increased by 17%.
Inflation results in rising costs and earnings. Higher costs and salaries translate into higher business earnings and wages. Increasing business and personal tax revenues result from higher profits and salaries.
Federal tax receipts are close to their all-time high of 20.5% of GDP, achieved in 1943 during World War II. This year’s collections are expected to be three percentage points higher than the 17.2% of GDP that was the post-war average for federal tax receipts.
The Inflation Reduction Act injects up to $80 billion into the IRS. Money will go toward stepping up enforcement, streamlining operations, enhancing customer support, and updating technologies. The fear that increased IRS resources will result in more audits or aggressive audits of at least some taxpayers is still very much present today.