Generation and Interpretation of IMPLANs Tax Repot
Questions on “Generation and Interpretation of IMPLAN’s Tax Impact Report”:
Under “Example Analysis” (page 5):
1. You state that adding 10 jobs to sector 371 yielded a total of $1.05 million in regional Value Added activity (not shown/discussed elsewhere). You then state that by looking at Figure 1 that sector 371 generates an additional $87,598 of tax revenue to state and local governments from all sources and an additional $166,416 to the federal government
a. I see where the totals come from in Figure 1. However, since Value Added also includes Indirect Business Taxes (one component of the taxes in Figure 1), aren’t the totals you state already included in the $1.05 million so they are not IN ADDITION TO the $1.05 million as you state? Furthermore, since Value Added includes Labor Income (employee compensation and proprietor income), which constitutes gross payments, isn’t part of the Labor Income going to pay taxes included in Figure 1? In fact, you go on to say in the next paragraph that ‘employee compensation turns over $2,293 to state/local government and $79,851 to Federal government. I think your language is misleading.
b. The ratios you discuss in the next paragraph are taken from Table 3 (ok), but how they are calculated within the parentheses are incorrect. The denominator in both cases should be $725,837 (not $79,851)
-
Hi Todd, We apologize for the confusion on this and we appreciate the feedback. We believe most of your concerns are already fixed in the latest iteration of our document which is on our website. We apologize that you did not get the most up-to-date version. It is found at: http://implan.com/index.php?view=download&alias=33-understanding-the-tax-impact-report&category_slug=internal-docs&option=com_docman&Itemid=1764 Because the example is trying to highlight just the tax component, which is not directly visible since it is embedded in the Value Added figure in the Summary Results, to try to reduce confusion, we have omitted the Summary Results form and jumped straight to a discussion of the tax impact forms. We apologize if this seems incomplete to you. Since taxes are only a component of Value Added (Value Added = Employment Compensation+Proprietor Income+Other Property Type Income+Taxes on Production), it is presumed that it is understood that we are talking about components of Value Added, after that statement is made. Thus it does not imply that those dollars are added to the Value Added figure which is already described as a Total value. Instead it is saying of that Value Added component, these are tax values in Figure 1 and how they are interpreted. You are correct that these are all sub-components thus, there is no addition. However, many of these concerns are streamlined in the online document (Summary Results are still not shown). The math error you describe is also corrected in the latest version of the document. Please let us know if you have any additional questions, and hopefully the online document will resolve your concerns. Thanks,
Please sign in to leave a comment.
Comments
2 comments