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IRS tax revenue falls along with taxpayers' income
By John Waggoner, USA TODAY
Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.
When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. "It illustrates how severe the recession has been."
For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago.
"These are staggering numbers," Lynch says.
Big revenue losses mean that the U.S. budget deficit may be larger than predicted this year and in future years.
"It's one of the drivers of the ongoing expansion of the federal budget deficit," says John Lonski, chief economist for Moody's Investors Service. The Congressional Budget Office projects a $1.7 trillion budget deficit for fiscal year 2009.
Originally posted by GreenBicMan
Yeah no doubt..
Its almost a guarantee it seems that if we have a big day so will they..
Maybe we are missing the boat here?
The so-called “recovery” seen in the United States over the past two months may be nothing more than a blip on the economic radar. Stock markets plummeted more than fifty percent during the first year of the downturn. It was only after President Obama took office and began escalating the amount of government funding going into stocks that the sector started to turn around.
However, the Obama administration has established policies that do not address the core instability of the financial sector. The administration only marginally cracked down on corporate mismanagement and has spent well over $1 trillion propping up a dying system.