Posted by: Jennifer Chang
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: October 7, 2009: 3:56 PM ET
Last Updated: October 7, 2009: 3:56 PM ET
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.
On balance, the Congressional Budget Office expects that tax receipts will be 14.9% of gross domestic product this year, well below the historical 18.3%average.
While revenue forecasts for next year are better, the CBO estimates tax receipts will only make up about 15.7% of GDP. Click Here to Read More
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.
On balance, the Congressional Budget Office expects that tax receipts will be 14.9% of gross domestic product this year, well below the historical 18.3%average.
While revenue forecasts for next year are better, the CBO estimates tax receipts will only make up about 15.7% of GDP. Click Here to Read More
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