Federal tax revenues drop sharply

WASHINGTON, May 27 (UPI) -- U.S. income tax revenues plunged 44 percent in April, compared with a year ago, the American Institute for Economic Research said.

The reason is easy to find. About 6 million U.S. jobs were lost in the 12 months prior to April, USA Today reported Wednesday.

The numbers, including a $138 billion drop in total federal tax revenues in the month, "illustrate how severe the recession has been," said Kerry Lynch, a senior fellow at the institute.

"These are staggering numbers," Lynch told the newspaper.

Dropping revenues are "one of the drivers of the ongoing expansion of the federal budget deficit," said John Lonski, chief economist for Moody's Investors Service.

The Congressional Budget Office estimates the 2009 budget gap will reach $1.7 trillion for the fiscal year.

With 77 million baby boomers headed toward retirement, it will be unlikely income tax revenues will grow in the near future.

"The American consumer led us out of previous recessions with some semblance of gusto," Lonski said. "They're too old to do it now."