Monday, August 3, 2009

Tax revenues in severe decline

The economic recession has tax revenues in a severe decline. Meanwhile, Congress is still spending money like "drunken sailors on shore leave." Actually, that is a disservice to drunken sailors. They will stop spending when they run out of money.

From AP via Yahoo:
The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession’s impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

Graphic from AP.

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