Federal tax revenues plunged 34 percent in April to $266 billion, compared to $404 billion in April of last year, according to a new study.
An analysis of Treasury Department data by the American Institute for Economic Research found that individual income tax revenues fell 44 percent in April 2009 to $137 billion, compared to $244 billion in April 2008. Thats not good news because April is the month when federal tax revenues tend to be highest because of the tax-filing deadline.
Corporate income tax revenues fell even more steeply, plummeting 64 percent to $15 billion last month, compared to $42 billion in April 2008. Social Security and other payroll taxes remained fairly steady, losing only $1 billion in a decrease from $92 billion to $91 billion. Other sources of federal tax receipts fell 12 percent from $26 billion to $23 billion.
The Obama administration projects that revenues will rebound in 2011, partly as a result of the stimulus package, noted AIER senior fellow Kerry Lynch. Indeed, they project that revenues will eventually be larger, relative to GDP, than they were even during the boom years of the late 1990s (when we had budget surpluses).
However, she added, even if that does happen, the administration also predicts that government spending will be so much higher each year that large deficits will continue, and the national debt will double over the next decade.
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