Individual Income Tax Receipts Fall Sharply in April Compared to One Year Ago

By George Yaksick, Washington Staff Writer

Revenue from individual income taxes fell 44 percent in April 2009 compared to April 2008, according to new statistics from the Treasury Department. Corporate, estate and gift and federal excise taxes also posted declines.

Individual Income Taxes

April is traditionally the month with the highest collection of individual income taxes. In April 2008, the Treasury Department collected $244 billion in individual income taxes. The government collected $136.7 billion in April 2009. This represents a decline of $108 billion or 44 percent. According to the American Institute of Economic Research (AIER), the 44 percent drop is the steepest decline since 1981.

Over the course of the current fiscal year, which started October 1, 2008, the government has collected $566.4 billion in individual income taxes. That amount compares to $747.6 billion at the same time last year. The Office of Management and Budget (OMB) estimates that individual income tax receipts will total $957.6 billion for the entire fiscal year (October 1, 2008 to September 30, 2009).

The decline in individual income tax receipts reflects the economic hardship experienced by millions of Americans during the recession. "Many individuals figured they would be making the same or more as last year but they are not," Raffaele Mari, CPA, Corona Del Mar, Calif., told CCH. Employers, including state and local governments, are not only discharging workers, they are also requiring employees to take temporary unpaid furloughs along with eliminating bonuses and other incentives, Mari noted.

Corporate Taxes

Corporate tax receipts also show a sharp decline. The government has collected only $71 billion in corporate income taxes so far this fiscal year. At this time last year, corporate income tax receipts totaled $171 billion.

Estate and Gift Taxes

Estate and gift tax receipts similarly have fallen. Over the course of the current fiscal year, estate and gift taxes amount to $16 billion. They totaled $18 billion at this time last year.

Excise Taxes

Lastly, federal excise taxes have declined. The government has collected $34.3 billion in federal excise taxes so far this fiscal year. At this time last year, federal excise tax receipts totaled $37 billion.