The month of December was supposed to be a bright spot in the Treasury's tax withholding calendar: after all taxes used to be the way this great nation funded its coffers until the Fed and Primary Dealers came along. And with Wall Street bonuses presumably at record levels, the withholdings were expected to jump not only compared to December of last year, but to all Decembers. Well, as is the norm with this administrations, these expectations never materialized, and instead rolling withholdings hit recent record lows.
The rolling twelve month individual tax witholdings in December dropped to a new multi-year low of $1.298 trillion (an 8.2% decline from last December). Yet this was nothing compared to the company tax witholdings. We thought November was bad at $99.2 billion. December came in at a stunning $92.8 billion, 61.5% lower then the LTM December 2008 number. Record financial profits, record bonuses, and the Treasury and US taxpayers are none the wiser.
How this stacks up on a month over month basis is presented below: in December individual tax withholdings were $151.7 billion, a surprising 9.4% reduction from December 2008 ($166 billion), while corporate tax withholdings were down a whopping 16.1%, at $39.8 billion. The all time record profits on Wall Street have been insufficient to even meet last year's tax collections, as Main Street has completely collapsed. Now this is a budget deficit change you can truly sink you teeth into.