Federal Tax Receipts Plummet In The US

by Leroy Baker, Tax-News.com, New York

18 April 2002

It has emerged that US federal tax receipts from individuals have taken a substantial nosedive this month compared with the same period last year.

Economic analysts from financial giants such as Goldman, Sachs & Co. and Merrill Lynch & Co. have revealed that the weak 2001 economy, coupled with a deep Wall Street bear market throughout the year, depressed revenue collection more than expected, and warned that the government may be obliged to borrow more than expected as a result.

With the tax-filing deadline in the US now passed, Treasury receipts for the month are so far coming in at around 30% lower than last April, a result which Goldman Sachs announced Tuesday was the biggest drop since 1980.

'The evidence so far on net individual payments to the Treasury is extremely poor,' Goldman Sachs economist, John Youngdahl, told the LA Times this week.

However, the US Treasury has so far declined to comment on the issue, arguing that it is too soon to make a complete assessment of the revenue collected from individuals.

Government estimates for April receipts are expected by the end of the month. However, with the announcement on Monday that corporate taxes paid monthly are also down around 17% on last year's figures, the future does not look especially bright.

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