Tax revenue drops 34% as more people lose their jobs

The American Institute for Economic Research (AIER) on Tuesday released the results of its research, that showed that tax revenue fell by $138 billion, or 34%, in April, compared to the year ago figures.

Kerry Lynch, senior fellow at the AIER and author of the study, considers that tax revenue recession is the result of the economic collapse. Thus, for instance, during the period of one year, ended in April 2009, about 6 million people lost their jobs, causing the tax revenue income to drop by 44%.

It's considered that enormous revenue losses mean the U.S. budget deficit may be larger than predicted this year and in future years. The Congressional Budget Office projects a $1.7 trillion budget deficit for fiscal year 2009. AIER claims government spending to be the other deficit driver.

As the White House thinks, tax revenue will increase in 2011, partly owing to the stimulus package. However it warns, "Even if that does happen, the administration also projects that government spending will be so much higher each year that large deficits will continue, and the national debt held by the public will double over the next 10 years."