We are a little confused by all the recent hype in the media about a surge in individual tax withholdings by the US Treasury. Our confusion is predicated primarily by the fact that this is patently not true. As regular readers are aware, we keep track of the primary source of this data, the Daily Treasury Statement which is the primary source for withholdings data, and, we observe that not only is there no secular or episodic boost in gross wittholdings (not net, we will run that report as well, although we have previously disclosed tha refunds in 2010 are actually way higher than 2009 so don't expecte that trend to change), but tax withholdings in 2010 continue to trend lower compared to the "abysmal" first quarter of 2009. Ironically so far 2010 is shaping up far worse than 2009, at least when it comes to tax withholding.
The chart below shows weekly gross withholdings Year over Year for the first 13 weeks of 2010, and the first 20 weeks of 2009.
The next chart indicates cumulative tax withholdings: it is obvious to see that the 2010 trendline is running well below 2009 collections.
When we account for refunds, we are positive that net withholdings will indicate an even uglier picture when it comes to the one organic source of funding for the government.