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Wednesday, September 30, 2009

State Tax Revenues Plummet 17%

Wall Street Journal, Falling Tax Revenues Slam States, by Conor Dougherty:

State tax revenues in the second quarter plunged 17% from a year earlier as rising unemployment and reduced spending hurt sales- and income-tax collections, according to Census Bureau figures released Tuesday.

The decline was the sharpest since at least the 1960s. The biggest drop among major revenue sources was in state income taxes, which were down 28% from a year ago. Sales-tax revenues fell 9%. About two-thirds of state revenues are derived from sales and income taxes. The numbers aren't adjusted for inflation or changes in tax rates. ...

States across the country saw big declines in personal income taxes, the largest single source of state funding, representing about a third of states' overall revenues. Eleven states -- including California, New York and Wisconsin -- saw personal income taxes fall more than 30%.

WSJ Chart


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Comments

The government, both Federal and State, spends too much money on things we don't need. They give away billions of dollars each year to countries, like Israel, that compete with us in the world marketplace, and who could very well stand on their own two feet, or should be relegated to the dustbin of history if they can't.

The US military budget is almost $1 trillion per year, an astronomical sum that actually makes us less safe, because we use it to bomb innocent people, which inflames passions against us and results in attacks such as 9/11. There are an infinite number of soft targets that can be hit with ease, so the best way to stay safe is to stop messing with other people and stop meddling in other peoples' internal affairs.

Similarly, the US trade deficit is approaching $1 trillion per year. This means that every single day of the year over $2 billion leaves the US, never to return, except possibly to purchase our infrastructure, companies, or national treasures. This is because the US tax code and "free trade" policies rewards companies for outsourcing our manufacturing jobs to nations that feature slave or near-slave labor, like China and Indonesia.

All this adds up to less tax revenue, because the corporations can avoid paying any meaningful taxes and the people no longer have good paying jobs to generate taxes. Rather than adjust their spending to compensate for their decreased income, as American families have had to do, the government increases its spending each year. This last year has seen record spending levels and trillions of dollars have been given to Wall Street bankers and gamblers, who already had most of the country's capital and who now own most of our grand-children's future earnings.

This cannot last. Eventually even the Chinese will refuse to lend money to the government and the Wall Street bankers surely aren't stupid enough to lend to this bankrupt system. We are already spending more on interest than is being generated in tax income, so the problem will continue to spiral out of control, faster and faster each month. Soon the US government will collapse under the weight of its debt and we will need to start over with a new government. That day cannot come soon enough.

Posted by: Doug@usa.com | Sep 30, 2009 3:41:50 PM

Putting less money into the hands of the corrupt thieves and liars who infest the Nations Statehouses can't be a bad thing.

Posted by: Bill Jones | Sep 30, 2009 4:50:27 PM

April 2009 our taxes increased from 8.25 to 9.25... I purposefully decided to stop buying new items and brought from alternative places where I could barter with cash. If they had decreased to 7.25 I would have bought more new items. Instead they raised our taxes again in July to 9.75% (Socal). I now buy pretty much nothing new.. this is my tax revolt.. Join me.

Posted by: ximy | Sep 30, 2009 8:35:17 PM