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1977 Memorandum on the Allocation of the Federal Tax Burden by Standard Metropolitan Statistical Area (SMSA) [1] (1977)

handle is hein.tera/malfthouts0007 and id is 1 raw text is: MEMORANDUM ON THE ALLOCATION OF THE FEDERAL TAX BURDEN BY STANDARD METROPOLITAN STATISTICAL AREA (SMSA) Fiscal Year 1977 This memorandum presents estimates of the Federal tax burdens borne by the residents of the nation's metropolitan areas (as defined by the Office of Management and Budget through December 31, 1977). For New England metropolitan areas, where towns rather than counties are the components of SMSA's, estimates are shown for the equivalent New England County Metropolitan Area (NECMA). Since the states of Vermont and Wyoming have no officially designated SMSA's, estimates of Federal tax burdens for Chittenden County, Vermont and Laramie County, Wyoming are included. The 266 metropolitan areas included in this study account for ap- proximately 80 percent of the personal income and 73 percent of the population of the entire nation. The estimates presented here are somewhat comparable to the state estimates which the Tax Foundation has prepared for many years; estimates of the distribution of the Federal tax burden by state for fiscal year 1979 are available in Tax Foundation's Memorandum on the Allocation of the Federal Tax Burden and Federal Grants-in-Aid by State, Fiscal Year 1979, April 1978. Since tax collections data published by official government agencies are not designed to reflect the geographical origin of Federal taxes, in terms of the ultimate incidence or burden, special estimating techniques are required to ascer- tain the taxes actually borne by the residents of each state or SMSA, as distinct from the places where the tax payments are initially made. For example, Treasury Department figures show that the bulk of Federal excise taxes on tobacco and tobacco products are collected in the few major tobacco-producing states, while the burden of these taxes rests on consumers of tobacco products in all areas. The bases used by the Tax Foundation in estimating the tax burden in SMSA's, together with the amounts of tax collected in 1977, appear in Table 1. Estimates of the Federal tax burden, both total and per capita, appear in Table 2, which also shows the percentage of the total Federal tax burden falling on the residents in each of the 266 SMSA's. The total tax burden is consistent with the official unified Federal budget concept introduced with the 1969 Budget presentation. The tax burden estimates are for fiscal year 1977, the latest for which applicable base data are available. In that year per capita Federal taxes for the nation as a whole averaged $1,599 ($1,728 in the 266 SMSA's covered here). In fiscal year 1979 per capita Federal taxes nationwide are estimated at $2,053, about 28 percent higher than in 1977. Therefore, on the average, the per capita tax burdens shown in Table 2 should be increased accordingly to obtain an estimate of current burdens. Further explanation of the formula by which both state and SMSA tax burden estimates are prepared--as well as its derivation, uses and limitations--is contained in Research Aid No. 5, Federal Tax Burdens in States and Metropolitan Areas, 1974. Copies of this 36-page report are available from the Foundation at $1.50 each. Tax Foundation, Inc. 1875 Connecticut Avenue, N.W. Suite 903 Washington, DC 20009 November 1979

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