We got a pleasant surprise on tax day. Instead of having to write Uncle Sam a check for a few thousand bucks, we will get a few thousand back. I suspect millions of tax payers who were paying provisional tax based on earlier years will also be getting refunds this year.

This CNN Money article backs up my suspicion:

As of March – or halfway through fiscal year 2009 – federal tax revenue is 14% lower than last year, the Congressional Budget Office recently reported.

In dollars and cents terms, that means Washington has $160 billion less to spend today than it did a year ago. All the while, the demands on the government to fund the country’s way out of recession are on a steep trajectory north.

“Receipts from almost all sources declined, reflecting the continuing effects of the recession and recently enacted legislation,” the CBO noted in its monthly budget review.

The economic crisis is showing up in the government’s profit-loss statement in myriad ways.

Considerably more people are out of work than they were last year – which means they’re not paying as much in income taxes. Corporate earnings have taken a beating, which means less taxable green coming in from that corner. And refunds have increased for individuals and corporations alike. All told, individual income tax receipts dropped 15% while those for businesses fell a whopping 57%.

Despite the drop in revenue, Congress is dramatically increasing government spending. It is running amok and the folks know it. Hence the tea parties.

Advertisements