While mass layoffs are hardly the stuff of dream recoveries [3], the following chart from Stone McCarthy may just clarify the un-recovery hopes this year a little more. Non-withheld individual income taxes were up sharply year-over-year in the last few months reflecting moves by taxpayers to accelerate income into 2012, in anticipation of tax hikes in 2013. However, now we have passed the prior year's tax liabilities deadline, and payments in June are just for the current year, there is a problem. Individuals make estimated payments if they expect they won't satisfy their current year tax obligation through withholding and as the chart below shows, non-withheld tax payments were down 3.0% versus the comparable period last year - hardly the stuff of consumer-spending-driven recoveries as clearly individuals are not expecting incomes to rise at all this year in aggregate. With every analyst and strategist pointing to H2 2013 as the hope-and-change driven recovery that satisfies a market's extrapolation way beyond current data, we suspect this tax-based deterioration signals more disappointment for the dreamers.
[4]
Via Stone McCarthy,
Non-withheld individual tax payments in January are made to satisfy the prior year's tax liabilities. The bulk of non-withheld payments in April are made to settle the prior year's tax bill, but some are estimated payments for the current year.
June 15 is also a date on which individuals make non-withheld tax payments, but payments in June are just for the current year. Individuals make estimated payments if they expect they won't satisfy their current year tax obligation through withholding. Today's Chart of the Day shows the year-over-year change in non-withheld tax payments for last June, as well as for January, April and June of this year to-date.
Through June 21, non-withheld tax payments were down 3.0% versus the comparable period last year -- five days from the tax date (June 17 of this year, since June 15 fell on a weekend.) It's possible that there will be some catch-up in the days ahead, although last year 95% of the month's non-withheld taxes had been collected by June 21.