USA Tax Revenues Down

October 9, 2009 Taxation in USA  No comments

According to latest reports published by Internal Revenue Service (IRS) the government’s tax revenue fell 25%, compare to the same period last year.

The corporate taxpayers paid 56% less, while individual taxpayers payed 20% less. Taking in consideration such significant drops, the Congressional Budget Office estimates that only 14.3% of GDP this year will come from the tax collection. Historically, USA enjoys approximately 18% of GDP from tax revenue.

According to experts, the predominant cause behind the tax revenue downfall is the present economic climate, although the current taxation policy of the US Government is also putting pressure on tax collection in general. The most noticeable tax changes for the current financial year include tax benefits for a wider range of American taxpayers. Among the most important of these are: the federal income tax exemption for unemployment beneficiaries; first-time home buyer credit; research and development credit for businesses and tax credit for health insurance.

The federal government is not the only victim, several states have also been hit dramatically by a fall in tax revenue. For instance, Indiana lost US$166 million in just one month compared to last year’s economic predictions, Massachusetts has plans to drop its revenue estimates by at least US$600 million, and Pennsylvania has begun its fourth month without an approved budget.

Leave a reply