Overspending Swells Federal Deficit in April 2009

Overspending Swells Federal Deficit in April 2009

What does massive government spending by the US government result it?    The inability to even show a monthly surplus in April, the historical high point of tax collections during the fiscal year (October through September), reflects the out of control spending by the Federal Government.   In fact the US treasury has not shown a negative monthly gap in April (spending vs. taxes collected) since 1983.    Thanks to the ongoing economic downturn, combined to massive Federal spending authorized by Congress, first April monthly shortfall in 26 years was experienced in Washington DC.  President Obama and the Congress Democrats appear to be determined to spend money US government doesn’t have, to fund programs we don’t need, that will cause increased taxes we don’t want.

WASHINGTON (Reuters) - The United States posted its first April deficit in 26 years, a record $20.91 billion shortfall as a deep recession caused revenues to collapse in the year's biggest tax collection month, the U.S. Treasury said on Tuesday.

The deficit, the first for April since a $3.3 billion gap in 1983 as the country emerged from a deep recession, was largely in line with forecasts from Wall Street economists polled by Reuters.  It brought the deficit for the first seven months of fiscal 2009 to a record $802.29 billion after a major positive accounting adjustment for the government's bailout investments.

Receipts for April, normally the year's biggest revenue month due to the April 15 deadline for federal income tax filing, fell to $266.23 billion from $403.75 billion in April 2008. Both individual and corporate income tax payments fell sharply from a year earlier.  But outlays set another April record, rising to $287.14 billion from $244.47 billion a year earlier.   www.reuters.com 

© 2009, Jasper Welch, Four Corners Media, www.jasperwelch.org

Spending + Borrowing = Higher Taxes

Spending + Borrowing = Higher Taxes

This week, Kansas Republican Lynn Jenkins gave the GOP response to President Obama’s weekly presidential address:  “The pace that Democrats in Congress and the White House are spending your tax dollars is simply staggering…know a thing or two about handling taxpayer dollars. I was the state treasurer in Kansas for six years before I came to Congress, and before that I practiced public accounting as a certified public accountant for nearly two decades.

So trust me when I say Washington’s books are a mess. 

It’s quickly turning into a symbol of everything wrong with Washington, D.C. – unchecked spending, no accountability and oversight, and more and more debt piled onto our children and grandchildren.

This week, we marked the president’s 100th day in office.  And while, like most of you, I like the president personally, I think the Democrats’ first 100 days running Washington can be summed up in three words: spending, taxing, and borrowing.” http://lynnjenkins.house.gov/

If you have had enough of overspending, taxing and waste in Washington, DC and throughout the Federal government, the next TEA Party Tax day will be Saturday July 4^th, as a TEA Party Day really near you.   With US national debt at $11 Trillion and counting, the TEA party organizers are reporting that 574+ rallies against higher taxes, excess spending and bloated government are planned for July 4^th 2009.  What does TEA stand for?   Taxed Enough Already!   http://www.teapartyday.com/ 

So just how much are US Taxpayers paying, as a percentage of their annual income in Federal taxes?   At the turn of the century, prior to income taxes at the Federal level, the US taxpayer burden was about 5% of gross income.   Tax Freedom Day®, as calculated by the US Tax Foundation  www.taxfoundation.org   occured in late January of the year.   By World War I, the US taxpayer burden was about 10% of gross income.   With the passage of the Individual Income tax and World War II (plus the New Deal), the US taxpayer burden rose to about 25% by the end of WWII.     It remained steady and rose slightly to top 30% by 1969.   It fell slightly during the Regan years (ranged between 29% and 31%), and then peaked again at a post WWII high of 33% at the end of the Clinton era.    The Bush tax cuts eased the US taxpayer burden back down to 29%, before slowly climbing back to 31% prior to the Obama election.     Here is the Tax Freedom Day® detailed history and tax law details: http://www.taxfoundation.org/files/sr165.pdf

Where did Tax Freedom Day® come from?   It was conceived in 1948 by Florida businessman Dallas Hostetler.  He originated the concept, calculations and copyrighted the intellectual property.  Upon his retirement in 1971, he deeded the intellectual property (IP) to the National Tax Foundation.

So when is National Tax Freedom Day® in 2009?   It occurred on April 13^th.  But if you add the deficit spending accumulated by the US Government (now at $11 Trillion), it will take American taxpayers until about June 1^st to pay for the ongoing and accumulated cost of the US government.

© 2009, Jasper Welch, Four Corners Media, www.jasperwelch.org