Friday, May 27, 2011

State Tax Collections Increase by 9.1% in the First Quarter, Largest Annual Gain in Almost Five Years

The Rockefeller Institute of Government reported this week that tax collections by state governments are showing strong improvements in the first quarter of this year compared to the same quarter of 2010.  Overall, tax collections increased by 9.1% in the first quarter of 2011 (based on preliminary tax collection data from 47 early reporting states), which is the largest increase since the second quarter of 2006, almost five years ago (see chart above).  The largest gain in the quarter came from a 12.4% increase in personal income tax collections, followed by increases in corporate income taxes (6.9%) and sales taxes (5.6%).  

Related reports: 

1. Unexpected state revenue in California leaps to $6.6 billion. (HT: Steve Bartin)

2. Massachusetts tax collections up 43 percent in April. (HT: Ben Cunningham)

8 Comments:

At 5/27/2011 10:22 AM, Blogger Innisfree said...

"tax collections ... are showing strong improvements in the first quarter of this year"

why is an increase necessarily an improvement?

 
At 5/27/2011 1:28 PM, Blogger Mark J. Perry said...

It's a sign of economic expansion and growth, in: a) indvidual income, b) corporate income, and c) retail sales.

 
At 5/27/2011 2:00 PM, Blogger juandos said...

Well if one is interested in state taxes, the amounts collected, and a comparison of the states consider the following site called IDEAS...

The first paragraph descriptor: 'Welcome to the IDEAS website, an online tool that helps people explore and compare tax rates across all states over time, as well as see how certain taxes impact everyday decisions. Within this website, you can create your own charts and tables, and you have access to a large comprehensive dataset that includes roughly 50 variables per state, over a span of decades'...

 
At 5/27/2011 2:04 PM, Blogger Che is dead said...

“Many states have announced higher-than-expected tax revenues lately, the first upbeat news to come out of beleaguered state budget offices since 2007. But the windfall is largely the result of smoke and mirrors. Revenue estimates for this year were set at ultra low levels, leaving plenty of room for good news. The reality is that state budget problems are the worst they’ve been since the start of the recession. State tax revenues are more than 10 percent below their 2008 levels, and 44 states and Washington DC have been scrambling to close a collective $112 billion budget shortfall for fiscal year 2012, which for most states begins July 1.”

Fiscal Times

h/t Instapundit

 
At 5/27/2011 2:44 PM, Blogger morganovich said...

"State tax revenues are more than 10 percent below their 2008 levels"

this is the telling figure.

it's easy to show huge % gains after big drops.

but in comparison to the last healthy economy, even the higher tax rates are not getting you back to anywhere near the previous levels.

 
At 5/27/2011 5:12 PM, Blogger Bernie Ecch said...

I wish I could remember the article and author but a couple months ago in the Daily Reckoning website someone wrote that the dumbest idea out there is increasing tax revenue means that the economy is recovering. What it really means, according to this person, is that states are finding more things to tax and increasing them.

 
At 5/27/2011 5:24 PM, Blogger James said...

It's a sign of economic expansion and growth, in: a) indvidual income, b) corporate income, and c) retail sales.


Could it be an increase in tax rates?

 
At 5/31/2011 2:43 PM, Blogger VangelV said...

So do we now predict that California and the other states will be able to dig out of the holes that they find themselves in? If not this is entirely meaningless even if the data point may turn out to be meaningful after a few more data points come in.

 

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