The federal government's tax receipts have pretty much fallen off the cliff, according to Treasury Department data with the 18 percent drop the worst since depth of the Great Depression.
The Associated Press reports:
WASHINGTON (AP) - The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation's plate and struggling to find money to pay the tab
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 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.
"Our tax system is already inadequate to support the promises our government has made," said Eugene Steuerle, a former Treasury Department official in the Reagan administration who is now vice president of the Peter G. Peterson Foundation.
"This just adds to the problem."
These numbers, while stunning, shouldn't be too surprising since the economy is experiencing the longest downturn since the 1930s Depression.
Meanwhile, the run-up in asset values during the booming bubble era, which ended in 2007, added greatly to tax receipts in recent years. What the bubble giveth, the crash taketh away.