U.S. government tax revenues from individuals are are down 22%, compared to 2008 numbers. Government revenue from corporate taxes has dropped a whopping 57% over the same time period.
The much great volatility in corporate tax revenue shows that corporations have shielded employees from more than half the effects of this depression. Of course, this can't last forever and eventually American companies will be forced to make more layoffs.
Social Security and Medicare taxes are also down sharply, a direct result of the highest unemployment levels the nation has seen in 26 years.
These are the largest declines in tax revenue for the federal government since the last great depression. However, the consequences of this drop could be far worse. In the 1930's, state governments largely funded their own activities through direct taxation. Today, state governments rely on funding from the federal government for many of their functions. The mismanagement of the federal government will have a cascading effect throughout almost every state government.
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Greg Martinez is the author of Tax Revenue Falls Sharply and a maintainer of Sales Tax vs. Income Tax.
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