Thursday, October 21, 2010

No One Pays Taxes On Business Not Done

I have been reporting on the increases in September state tax revenues for at least 14 states so far, and have suggested that this should be interpreted as a sign that the economic activities subject to state taxes (retail sales, individual income earned, corporate income generated, etc.) are expanding as the economy improves.   

In today's "The Gartman Letter," Dennis seems to concur that the improving tax collections reported for September are a sure sign of economic strength:

"We don’t know many things upon which we can count on unequivocally, but we can count upon this: no one in history has ever paid taxes upon business not done. Taxes are paid on business done; on deals consummated; on sales made and delivered; on hours worked and billed."


At 10/21/2010 2:30 PM, Blogger Buddy R Pacifico said...

This comment has been removed by the author.

At 10/21/2010 2:47 PM, Blogger juandos said...

Interestingly the Rockafeller Institute has a different view for what its worth: Overall State Tax Revenue Is Up, But Losers Still Outnumber Gainers


Overall state tax revenues grew by 2.4 percent in the first quarter of 2010, compared to the same quarter a year earlier, based on preliminary data.

*Thirty-four of 49 early reporting states saw declines in overall tax collections.

*Personal income tax revenue increased by 2.7 percent for the nation. Thirty-four states reported declines in personal income tax collections.

*Sales tax collections increased by 0.5 percent, while corporate tax collections increased by 2.3 percent.

*This is the first time since the third quarter of 2008 that states are reporting growth in tax collections on a year-over-year basis. Such growth is mostly attributable to revenue growth driven by legislated changes in two states alone — California and New York.

*Revenues are still significantly below prerecession levels, and the important April collections from income taxes showed a 7.6 percent year-over-year decline.

At 10/21/2010 3:14 PM, Anonymous Anonymous said...

Uh, Juandos, your numbers are from the 1st Quarter.

At 10/21/2010 3:52 PM, Blogger Buddy R Pacifico said...

This comment has been removed by the author.

At 10/21/2010 5:06 PM, Blogger juandos said...

"Uh, Juandos, your numbers are from the 1st Quarter"...

I understand that rufus hence the reason I boldened the words California and New York to show why the rates of revenue went up...

Rising revenues doesn't necessarily signify (though it could) rising incomes due increased sales of products or services...

At 10/21/2010 9:47 PM, Blogger Hydra said...

Gotta love juandos.

Every silver lining has a big black cloud around it.

As long as Obama or any democrat is president.

At 10/22/2010 1:08 AM, Blogger Craig Dennis said...

Hmm. Property taxes are taxes on ownership itself. No business there, but you still pay the taxes even after decades of paying over and over for the same house. Detestable.


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