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alstry (36.12)

Will there be any taxpayers left? Media Catching On?

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August 04, 2009 – Comments (8)

We know government spend is about $6.5 Trillion factoring Federal, State, and Local governments....about half the GDP. 

For this report, the AP analyzed annual tax receipts dating back to the inception of the federal income tax in 1913. Tax receipts for the 2009 budget year were available through June. They were compared to the same period last year. The budget year runs from October to September, meaning there will be three more months of receipts this year.

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession's impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

The last time the government's revenues were this bleak, the year was 1932 in the midst of the Depression.

"The numbers for 2009 are striking, head-snapping. But what really matters is what happens next," said Gale, who previously taught economics at UCLA and was an adviser to President George H. W. Bush's Council of Economic Advisers.

"If it's just one year, then it's a remarkable thing, but it's totally manageable. If the economy doesn't recover soon, it doesn't matter what your social, economic and political agenda is. There's not going to be any revenue to pay for it."

http://finance.yahoo.com/news/AP-ENTERPRISE-Federal-tax-apf-2967547650.html?x=0

BINGO!  There's not going to be any revenue to pay for it.  AND $6.5 TRILLION IS A LOT OF IT.

The growing problem is things deteriorated since June based on recent corporate reports and unemployment numbers.  And due to current Zombulation policies, we know continued deterioration is going to accellerate as more and more families, businesses, municipalities, school districts,  and hospital will not be able to service high debt service.

Today Jefferson County laid off 2/3 of its work force and personal and business bankruptcies are skyrocketing.  Finally the media is catching on that firing a worker is also firing a taxpayer...and a net reduction in tax revenues if the business is still not profitable after the job cut.

GM firing 7,500 more taxpayers (24/7 Wall St.)

Those workers will simply have to go to the unemployment line without any special severance package.

Consensus estimates are that 275,000 people lost jobs in July. GM is planning to layoff about 3% of that many people. Each time a large American company cuts a few thousand more people. the odds that joblessness will stabilize suffers.

The perverse part of the GM “downsizing” is that each worker who losses a job is a taxpayer who is likely to become a ward of the state, an unemployed person who costs money to support. GM has been firing taxpayers at an alarming rate for the several quarters.

http://247wallst.com/2009/08/03/gm-firing-7500-more-taxpayers-to-save-taxpayer-money/#more-43019

Now we are putting the pieces together to this puzzle.

The last time the numbers were this bleak was at the trough of The Great Depression and now the outlook is even WORSE!  The above doesn't even contemplate the loss of tax revenues from the millions of workers shifting from full time to part time and those getting wage cuts.

the only question is how are we going to spend billions and billions MORE on our military and other programs if there is simply no money to pay for it?  Based on the current rate of deterioration in revenues and incomes by individuals and corporations from zombulation, it's likely if we tax remaining eligible citizens and businesses 100% of income, it will not be enough.

Now we enter Obama's Paradox.  Tax the citizens 100% of income or cut government spending and drive our nation into a Depression not seen in over 70 years.

8 Comments – Post Your Own

#1) On August 04, 2009 at 6:54 AM, alstry (36.12) wrote:

How many taxpayers will we lose just from the Post Office?

Local postal stations may be on chopping block as post office faces large losses

WASHINGTON (AP) -- The local post office long has been the center of many American communities, but with people turning increasingly to the Internet to send messages and pay bills, financial losses are forcing the Postal Service to consider consolidating or closing hundreds of local facilities.

There are 32,741 post offices across the country.

http://finance.yahoo.com/news/Post-office-looks-at-changing-apf-318284638.html?x=0&sec=topStories&pos=main&asset=&ccode=

That is a lot of taxpayers and rent revenues to landlords.

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#2) On August 04, 2009 at 7:33 AM, alstry (36.12) wrote:

THE MATH JUST DOESN'T WORK...

For New York City's 281,000 employees, average compensation has risen 63% since 2000 to $107,000 a year. New Jersey teaching veterans receive $80,000 to $100,000 for ten months' work. In California prison guards can sock away $300,000 a year with overtime pay.

http://www.forbes.com/forbes/2009/0216/078.html

With declining revenues, wage cuts are inevitable for Cities and States.  If the state pays their employees less, that is less taxes to the Federal Government.....and right now the states don't have enough to pay employees....so that means Obama will have to raise Federal Income taxes to compensate.

It seems all roads lead to Obama's Paradox.....higher taxes or depression....except one.

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#3) On August 04, 2009 at 8:25 AM, toopersent (81.14) wrote:

Classic case of cause and effect.  Right now, you are seeing the effect caused by previous events.  We are/were in the biggest recession since the great depression, so what would expect to see?  Of course there are going to be layoffs and shrinking tax reciepts! 

Also, consider the increasing amount of tax credits available because of the recession.  Things like first time home buyers credit, and higher credits for energy efficient home installments drive tax revenue down as well. 

Im tired of this fear mongering from the media!  You know what I see...let me share this with you.

I was at Busch Gardens in Williamsburg two weekends ago (its a theme park, for those that didn't know).  Normally when I walk in there, I expect to see a whole bunch of Europeans (with work visas) greeting me and offering to take pictures, serving lunch, working at all the little shops and games throughout the park, etc.  But no, I didn't see hardly a one of them.  I thought that was odd.  Then I realized, finally the local Americans who thought they were too good for minimum wage (or close to it) jobs came in to take those jobs because they had no other option.

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#4) On August 04, 2009 at 8:43 AM, alstry (36.12) wrote:

toop,

What you miss is the real cause and effect.  The Fed oversaw the infection of our economy with a debt load that can't be paid back on minimum wage.

Our Hospitals have debt.  Our Schools have debt.  Our Cities have debt.  Our Counties have debt.  Our States have debt.  Our Police Officers have debt.  Our Firefighters have debt.  Our Doctors have debt.  Our Nurses have debt.

The creation of this debt drove our economy for the past 10 years and supported the doubling in size of government.  Now government accounts for over half of GDP and has basically become the driver of our economy.   Unfortunately our government also has accumulated massive debt to service.

This debt has to be fed...unfortunately minimum wage simply can't feed it.

Now the question is who starves?  The government needs to eat, the citizens want to eat too....but your politicians want to be paid....when there is not enough money to feeding government, the taxpayer is the only source to get more.

Minimum wage workers can't feed government....Government needs $6.5 Trillion dollars....you do the math.

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#5) On August 04, 2009 at 8:49 AM, alstry (36.12) wrote:

THE MATH IS ONLY GOING TO GET WORSE...

Personal incomes fall 1.3% in June, reversing May's stimulus gain

As incomes fall, so will the revenues to government.

The more you tax corporations, the lower the earnings and likely lower the stock price.  The more you tax citizens, the less they can spend.

If government spends less, as the biggest driver in the economy, the economy will contract sharply.

Welcome to Obama's Pardox.....if we don't restructure debt soon, our economy will contract over 50% very soon.....or else we can keep printing and our money will be worthless......how many of you want to work for worthless money?

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#6) On August 04, 2009 at 10:24 AM, alstry (36.12) wrote:

New Jersey outlook lowered by Moody's

No kidding.......just beginning?

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#7) On August 04, 2009 at 11:47 AM, aqua2 (< 20) wrote:

"In California prison guards can sock away $300,000 a year with overtime pay"

Man this is just sick if it is true.  In my area prison guards just get by, will be sure to tell them about Cali.

Alstry, there is one solution you haven't thought off.  Sell Cali to the Chinese.  Bet you they could solve Cali's pension problems and not to mention illegal immigration.

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#8) On August 04, 2009 at 3:32 PM, AdirondackFund (< 20) wrote:

@ aqua2

Oh, it be true. 

Selling California would be the worst thing we could do, or the entire west coast for that matter.  You see, all of the new inventions of the last few decades, the game changers, have ALL come out of California and Washington State.

Personal income down 1.3%, 18 months into a Depression, with Stocks at new highs?  Yeah.  Nice economy we have here.  The train is plummetting down the side of a ravine and is clearly off track.   

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