According to an Associated Press analysis, federal 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.
William Gale, co-director of the Tax Policy Center says, “The future of current programs—not to mention the new ones Obama is proposing—will depend largely on how fast the economy recovers from the recession.”
The numbers for 2009 are striking, head-snapping. But what really matters is what happens next. If it’s just one year, then it’s a remarkable thing, but it’s totally manageable. If the economy doesn’t recover soon, it doesn’t matter what your social, economic and political agenda is. There’s not going to be any revenue to pay for it.
Given that corporate tax revenues are down a staggering 57% from last year, I think you’d be hard pressed to claim that we are starting to recover from the recession we’re currently in. Maybe this could be why the Obama administration delayed releasing data on the economy, so as to try to cram more of their legislation through congress prior to the summer recess? Tax hikes anyone?