The American Pundit

The month that usually brings in the most revenue for Uncle Sam, April, saw a major decline in cash flow for the Internal Revenue Service. That’s the revelation from a report issued by the American Institute for Economic Research today.

Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.

When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. “It illustrates how severe the recession has been.”

For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago. …

Big revenue losses mean that the U.S. budget deficit may be larger than predicted this year and in future years.

If you thought the White House and CBO’s deficit projections were terrifying (and you’d be right)

the projections should end up being that much worse now that revenues are down. The sharp fall in flow of cash into the IRS, in addition to every multi-billion or trillion dollar spending program Obama’s cabinet can come up with, is a disastrous formula that leads this nation down a very bad path.

It’s time to start curbing government spending. Either that, or find a way to increase revenues through additional taxation (though, as John F. Kennedy understood, you increase revenues by cutting taxes). And I’m not seeing that happen in the middle of a major economic recession, with Obama having promised 95% of Americans that he wouldn’t raise their taxes.

Look, President Bush spent far too much money. But glance up at that chart again. The gray lines indicate the money that Bush, along with members of Congress such as Senator Obama, spent that we didn’t have. The red lines are the CBO projections for the Obama Administration’s spending — before this decline in revenue and future spending programs is calculated. You’ll excuse my being less outraged at the ‘08 gray line than the ‘09 red one.

Via HA.