We have a BIG Zombulation Problem!!!!!!
The American citizens have too much debt supressing income and spending and government needs all the income we got!!!
Below just discusses State issues....Cities, Counties, Parishes and the Federal Government all face similar problems.
State legislators faced with mammoth budget gaps and sharply lower revenue are looking to residents to bail them out.
Right now, at least 47 states are facing significant shortfalls in their 2009 and/or 2010 budgets, according to the Center on Budget and Policy Priorities, a think tank in Washington, D.C. And many of those states are looking to tax hikes to help fill the gaps.
“Pretty much everyone is doing poorly,” says Kim Rueben, senior research associate at the Tax Policy Center. “It’s just a question of who’s hurting more than others.”
The top honor goes to California, which is projecting that it will fall about $25 billion short come fiscal 2010. Taking second place is New York with a projected $17.6 billion deficit for fiscal 2010, according to the National Conference of State Legislatures, a bipartisan policy research organization in Washington, D.C.
How can these states miss the mark so badly? The recession has sapped the two major sources of state revenue: income taxes (thanks to rising unemployment, fewer people are getting paid) and sales taxes (quite simply, consumers are spending less.) “Those two things together really, really lead to a high loss of tax revenues, far in excess of loss of income,” says Michael Hicks, director of Ball State University’s Center for Business and Economic Research.
State income-tax revenue fell 26% in the first four months of 2009 compared to the same period last year, according to a survey of states by the nonprofit Nelson A. Rockefeller Institute of Government.
The time span notably includes the April 15 deadline for filing taxes, a critical time for states to collect revenues.
Note that the YoY change for April is worse in all regions than the first four month comparison.
The trend for tax collections deteriorated as the year progressed through April. Based on preliminary retail sales, it seems like May is continuing the trend....so much for green shoots. With Government now spending about $6.5 Trillion dollars....or about half the GDP......the slowdown in the economy will be ENORMOUS if spending is curtailed materially.
So which is it......should government tax us practically everything we have or should spending slow drastically???? This is the issue President Obama and practically every government leader faces.....do you think your politicians want a paycut or would they prefer to tax the gills out of you????