Posted by Tina
“The great tax drought of 2009,” by By Jeanne Sahadi, CNNMoney.com senior writer
NEW YORK (CNNMoney.com) — You don’t need a Ph.D in economics to know that the government fiscal year that ended last week was ugly for the budget. ** Much attention has been paid this year to the record-high spending and deficit accrued because of the financial and economic crisis. ** But one of the driving factors that has gotten less notice: plummeting tax revenue. The crisis, after all, walloped company profits and savaged Americans’ income stream. ** Through the end of August, Uncle Sam collected 25% less in tax revenue for the year than he did during the same period a year earlier. The two biggest culprits — a 56% drop in corporate income tax revenue and a 20% drop in individual income tax revenue.
The thought is that this loss of revenue is due to the “financial and economic crisis”. I would add it is also a result of a failure by the new administration to take steps that would stimulate the overall economy…like tax cuts and incentives that have proven to work under both Republican and Democrat administrations going back to the sixties. (George W. Bush, Ronald Reagan and John F. Kennedy).