Federal personal income tax liabilities and payments for 1959-2002

Survey of Current Business, Dec, 2004 by Mark A. Ledbetter

The estimates of Federal personal income tax payments for 2001 are revised, and the estimates of Federal personal income tax liabilities and payments for 2002 are new. (1) These estimates incorporate the results of the 2004 annual revision of the national income and product accounts and the newly available tax return data for 2002 from the Internal Revenue Service.

For 2001, personal income tax payments exceeded personal income tax liabilities by $136.9 billion. This substantial difference was partly accounted for by a slowdown in economic activity and by the enactment of the Economic Growth and Tax Relief Act of 2001 that reduced tax liabilities. (2)

For 2002, personal income tax payments exceeded personal income tax liabilities by $31.0 billion. The difference can be partly accounted for by the Job Creation and Worker Assistance Act of 2002, which was signed into law on March 9, 2002. (3) This act contained retroactive provisions that resulted in a reduction in tax liabilities for 2002 and an overpayment of taxes for the beginning of 2002. Specifically, these provisions affected the tax liabilities of sole proprietorships, partnerships, and S corporations by the addition of a first-year depreciation deduction on qualified property, by the extension of the "general net operating loss carry-back deduction" from 2 years to 5 years, and by retroactive tax benefits for the area of New York City that was damaged by the terrorist attacks of September 11th, 2001.

Federal Personal Income Tax Liabilities and Payments for 1959-2002

[Billions of dollars]

            Federal personal income taxes

        Liabilities    Payments    Difference
           basis       basis (1)

1959        39.0         38.5           0.5
1960        39.9         41.8          -1.9
1961        42.7         42.7           0.0
1962        45.4         46.5          -1.1
1963        48.8         49.1          -0.3
1964        47.8         46.0           1.8
1965        50.2         51.1          -0.9
1966        56.8         58.6          -1.8
1967        63.7         64.4          -0.7
1968        77.5         76.4           1.1
1969        87.4         91.7          -4.3
1970        84.5         88.9          -4.4
1971        86.1         85.8           0.3
1972        94.3        102.8          -8.5
1973       108.9        109.6          -0.7
1974       124.4        126.5          -2.1
1975       117.3        120.7          -0.4
1976       142.8        141.2           1.6
1977       161.0        162.2          -1.2
1978       189.6        188.9           0.7
1979       216.1        224.6          -8.5
1980       252.3        250.0           2.3
1981       286.7        290.6          -0.9
1982       280.2        295.0         -14.8
1983       277.8        286.2          -8.4
1984       306.7        301.4           5.3
1985       331.5        336.0          -4.5
1986       374.9        350.1          24.8
1987       378.7        392.5         -13.8
1988       422.0        402.9          19.1
1989       440.1        451.5         -11.4
1990       453.4        470.2         -16.8
1991       455.4        461.3          -5.9
1992       483.1        475.3           7.8
1993       508.5        505.5           3.0
1994       540.3        542.7          -2.4
1995       592.9        586.0           6.9
1996       664.5        663.4           1.1
1997       742.5        744.3          -1.8
1998       800.5        825.8         -25.3
1999       892.4        893.0          -0.6
2000       994.2        999.1          -4.9
2001       857.6        994.5        -136.9
2002       800.2        831.2         -31.0

(1.) This series is presented in NIPA table 3.2.

(1.) For a discussion of the payments series, the derivation and the use of the estimates of tax liabilities, and the sources of the differences between liabilities and payments, see Mark A. Ledbetter, "Federal Personal Income Tax Liabilities and Payments," SURVEY Of CURRENT BUSINESS 84 (June 2004): 17-20.

(2.) For more on information, see Ledbetter; 18-19.

(3.) For more information, see the box "Retroactive Provisions of the Job Creation and Worker Assistance Act of 2002," SURVEY 82 (April 2002): 6.