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Thursday, August 4, 2011

Jobs falling, income dropping, according to 2009 tax data

David Cay Johnston (h/t Mark Thoma) has a new column up on the results of the latest income tax data (2009). With the economy back at stall speed, things probably won't look much better when the 2010 data becomes available next year. Or the 2011 data, either. Some excerpts:

(Reuters) - U.S. incomes plummeted again in 2009, with total income down 15.2 percent in real terms since 2007, new tax data showed on Wednesday.

The data showed an alarming drop in the number of taxpayers reporting any earnings from a job -- down by nearly 4.2 million from 2007 -- meaning every 33rd household that had work in 2007 had no work in 2009.

Average income in 2009 fell to $54,283, down $3,516, or 6.1 percent in real terms compared with 2008, the first Internal Revenue Service analysis of 2009 tax returns showed. Compared with 2007, average income was down $8,588 or 13.7 percent.

Average income in 2009 was at its lowest level since 1997 when it was $54,265 in 2009 dollars, just $18 less than in 2009. The data come from annual Statistics of Income tables that were updated Wednesday...

The share of households filing a tax return but paying no income tax results from two key factors:
* One is the drop in incomes because a married couple does not pay income tax until they make at least $18,300, and families with two children pay no income tax until they make more than $40,000 under policies started in 1997 and since expanded at the behest of Congressional Republicans, many of whom complain that too many households do not pay income taxes....
 So, we have a full 12 years of no income growth. (Remember, this is average income; it would be useful to see what happened to median income as well.) Millions of jobs lost. And the priority out of the White House and Congress is fixing a long-run deficit problem caused primarily by rising health care costs rather than doing anything about the immediate job deficit. Depressing.

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