We have not run these charts from Matt Trivisonno in some time;  they are simply jaw dropping:





Category: Economy, Finance, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

47 Responses to “Withholding Taxes Chart (July 15, 2009)”

  1. leftback says:

    Yow. Is that Federal, States, or combined?

  2. ben22 says:

    so how do we pay for all the new programs? oh yeah…..

  3. AmenRa says:

    As unemployment increases the data points on the graph will be off the chart. Wow. The government can’t continue to spend if the taxes aren’t coming in.


    I hope it’s including both. If not then yikes!!!

  4. Onlooker from Troy says:

    Scary stuff.

    I don’t know how anybody can look at this or the deficit numbers at half the annual budget and not have a knot in their stomach. We’ve become inured to these numbers for now, but reality will set in eventually that we’re on an unsustainable path. But in the mean time we’ll be calling for more of the same to “stimulate” our dead corpse of an economy. Will this be the death knell for Keynesian economics?

  5. ben22 says:

    I think it includes both however it does not include income taxes from self employed people, which I would think might make it look even worse. Lots of small biz owners struggling or at the very least doing less in sales so lower rev and lower tax.

  6. Onlooker from Troy says:

    It’s not precisely clear from his blog or the Treasury web site whether it includes state, but since he’s pulling it from the Treasury I can’t imaging that it’s anything other than federal receipts. So that’s a plus. :(

  7. Onlooker from Troy says:

    In drilling down further to the report itself it’s increasingly clear that this is fed only.

    “Cash and debt operations of the United States Treasury”


  8. Bob A says:

    but… how could this be surprising?

  9. sbailey says:

    Part of the drop in the second quarter is due to the stimulus tax cuts. Still pretty grim.

  10. Bob A says:

    I mean.. we know employment is down no? we know capital gains are down no? so surprised at these numbers? we’re smart arent’ we?

  11. manitoumonk says:

    It would be interesting to see something like this broken out by income quintile. I would imagine that a lot of this is being driven by upper end and middle class income earners taking it in the shorts.

  12. leftback says:

    Dr. Krugman, our Nobel Laureate, is beginning to catch up with the “radical elements” of the blogosphere:

    “What GS does is not good for America” is pretty radical stuff, coming from our Paul. This is steady progress.

    I suppose we must resign ourselves to the fact that he and Stiglitz will remain moderate in their public utterances so as to be able to talk truth to power occasionally at the WH. Max Keiser probably won’t be invited to dinner.

  13. Onlooker from Troy says:

    Yes, Bob, we know that. And I don’t know that anybody here expressed surprise. It’s just rather jolting to see it illustrated this way, especially when juxtaposed to our soaring stock market and talk of recovery. That’s all.

    But thanks for the enlightening remarks.

  14. cvienne says:

    Back in March when they were doing the budget (and planning expenditures), weren’t they using forecast models for something like 4% GDP growth in 2010?

    This is s serious fly in the ointment, a monkey in the wrench, a pain in the ass…

  15. Marcus Aurelius says:

    We might currently have deflation, but it would seem, by looking at this chart and with all other things considered, inflation can’t be too far in the future. Money must make it’s way to the indebted, formerly taxpaying masses, and it’s not going to be borrowed money (fewer qualified borrowers each day, and those who qualified are saying no thanks). There is no other way out . The money supply (including debt), is vastly greater than the currency supply, and there’s only one way to fix that without a general default on the debt.

    It seems inevitable. Am I missing something?

  16. DL says:

    MA @ 12:22

    Much depends on which inflation parameter you’re looking at.

    Different measures of inflation will produce different conclusions.

  17. flipspiceland says:

    While at the same time I’d wager that the withholding taxes from Federal Employees and their sycphants is rising in exactly the inverse.

  18. Porsche87 says:

    To make matters worse, witholdings are about the only government revenues, since people will offset any capital gains from the recent runup with losses from the last 2 years.

  19. Transor Z says:

    This is a helpful datapoint because of all of the involuntary part-timers out there that aren’t counted in most unemployment sets. I wish his charts/data went back before 2000.

  20. Bruce N Tennessee says:

    AmenRa Says:

    July 17th, 2009 at 11:51 am
    As unemployment increases the data points on the graph will be off the chart. Wow. The government can’t continue to spend if the taxes aren’t coming in.

    ….They can’t?

  21. cvienne says:


    the light is always dimmest the moment before it plunges into absolute darkness

  22. leftback says:

    Not much action today except for the MONSTER squeeze in CIT and a small rally in energy stocks.

  23. AmenRa says:


    Well maybe they can. They just use IOU’s instead. It’s funny that you hear the government talk about consumers having too much debt and yet they can’t get anywhere close to balancing the books either.

  24. leftback says:

    Hey, manhattan guy, very good calls on crude oil this week. Must confess I thought you were wrong.

  25. investorinpa says:

    Barry and others,

    Don’t most of you think that people have wised up and rather than let the government take a bigger portion of their withholding in their checks, the people are smartly changing their W4′s to get the maximum paycheck? Especially workers in California who have seen THEIR tax money that should be refunded to them coming back in the form of an IOU. Anyone in Ca who is not maxing out their withholding is doing themselves a disservice because the state already has made it clear that your money is their money first.

    I know for me personally, I take tha max out that my accountant tells me I can and then wait till tax time to let my RE deductions cancel out whatever is owed. I’m in no means a sophisticated investor but I would think this is common sense.

  26. leftback says:

    Looks like there might be one more pump left in the market before op ex. Hold on to your appendages….

  27. Onlooker from Troy says:


    That may be the case at the margin, with a relatively small number of people, but mostly, no, I don’t think it’s a major factor here.

    Those that would do this have already been doing it, IMO. Maybe a small number of people have wised up, but not many.

    BTW, since when has common sense prevailed in personal finance in this country? :)

  28. ben22 says:


    No, I don’t think that is what is happening at all. I rec w/h changes all the time to clients that are getting too large of a refund and most of them look at me like i’m from outerspace. You also want to keep in mind that many many households, the tax refund is their only “savings” over the course of the year. Can’t tell you how many people I’ve met over the years that are loaded with debt that depend on that check each spring to pay some bills, when you explain to them that they are providing a no interest loan, they don’t get it.

    So, while I’m sure that happens here and there, I don’t think it explains the charts above. Most people are just don’t know.

  29. ben22 says:

    I talked with a lot of other reps today, they are getting a new flood of calls from clients asking permission to buy banks and tech. Granted this is a small circle I spoke with, probably overseeing roughly 600m in total assets, but I have to imagine they aren’t the only one’s getting the calls. This has happened a couple times now during this rally but we are much further along than we were when these kind of calls first started. We all know retail will jump in the mix at exactly the wrong time. While this might not be it, I think we are getting much closer. Let’s see what things look like in another 30-45 days.

  30. ben22 says:

    Yesterday I heard the “senior economist” Steve Liesman hyping the benefits of the shrinking trade deficit along with misrepresenting Roubini. This link might be an interesting response to the English major’s thesis:



  31. leftback says:

    Buy, Johnny, Buy !!!! Right into Triple Witching.

  32. Onlooker from Troy says:

    Ridiculously predictable isn’t it ben?

  33. manhattanguy says:

    Excellent article..next leg down will make SPX test March lows


  34. Onlooker from Troy says:


    Certainly pretty much matches the EW scenario from what I understand, other than that there’s still more upside likely in Prechter’s forecast. Pretty brutal if that’s what’s coming. And I don’t doubt myself and that’s why I feel like shorting these levels isn’t that risky in the longer term. It’s analogous to buying near the ’98 lows.

    Of course nobody knows the future so you can’t bet the farm on it.

  35. leftback says:

    “Hi honey, you remember you were worried about our investments this winter?
    Uh-huh, the market always comes back, remember, Brian told us.
    What’s that? Oh yeah, I know, that Noobini guy. What a kook.
    Well, anyway, guess who just called?
    Brian! You remember, Brian, our broker?
    No? Brian, our buddy, from the barbecue.
    What’s that? He’s married to who? Cindy? The one with the huge..?
    Implants? No way…. Anyway, Brian says that….
    Do I think what?
    No honey, you look great as you are.
    Anyway, Brian just got us into some GREAT STOCKS.
    Right, BAC and C just reported GREAT EARNINGS.
    Yeah, so no need to worry about Noobini.
    What’s that? Well maybe, if our stocks do well…..”

  36. Jim C says:

    Meh…the tax withholding change the goverment put in is half of that withholding change. My witholding went down about 10%. Same paycheck, but the government is collecting less.

    The other 10% is the increase in unemployment, most likely, but please don’t make out like it is all due to unemployment (or even most of it).

  37. jc says:

    These are daily WH reports so they MUST be US only, they can’t be capturing all states too.

    Imagine what CA and some other states WH must look like? No wonder the banks won’t accept CA IOUs for redemption in Oct if CA can’t pay now how can they pay in Oct with even more out of work? The daily CA rev report must cause the governator’s large jaw to drop to his hairy Aryan chest when he sees it. Boy, did he make a vocational mistake!

    I think US withholding rates were reduced as part of the first stim or was it second stim?

  38. jc says:

    How do you think the foreign buyers of US debt feel when they see this chart? Risk premium?

  39. I-Man says:

    Nice screenplay there LB…


  40. jc says:

    The impacts of these job losses is cumulative, every month is less tax receipts, less retail spending, more closed malls, more foreclosures etc. Going from 650K reported losses to 600K when you have seasonality and birth/death adjustments and subsequent revisions isn’t a green shoot when the true quarterly number is 2M long lasting job losses.

    Gary Shilling got the “Big Picture” right when he said when he said going from a negative savings rate to a 10% savings rate is going to drop consumption from 70% of GDP to 60%, this is a sea change. The home ATM is closed indefinitely!

  41. Onlooker from Troy says:


    quote: “…but please don’t make out like it is all due to unemployment (or even most of it).”

    Who said it was? And yes, we realize that withholding rates were reduced as part of the household balance sheet repair plan, oops, I mean the stimulus plan. Most here are just floored by the longer term repercussions that will flow from this, not surprised that they’re lower.

    And seeing it graphically displayed really brings it home.

    And personally I think it’s folly to borrow money at the national level to pay down debt at the household level, which is where a large portion of this money is going. And some are saving that money to prepare for paying higher taxes in the future. How much sense does that make? It’s like me borrowing money to save to pay future bills.

  42. leftback says:

    “going from a negative savings rate to a 10% savings rate is going to drop consumption”

    right on with that, jc. You should probably post that every day b/c it’s not going to change for years…

  43. you know, for all the squawk about ‘cold steel’ y ‘balls’, it’s sad that noone? cares to realize that Oil/the Petro $ is the ‘frozen pole’ that, just, ‘taint necessary..

    til’ that realization, we’ll keep catching the Lash, well-earned, from our Ignorance, thereof.

    and, yes, the ‘deflationistas’ have, as Desi Arnaz made so popular, “…some ‘splaining to do”..

  44. Moss says:

    Lets look at the bright side.. the massive short term trading profits the banksters just made will surely add to the coffers at Treasury.

  45. hank says:

    What does it matter if the graph represents Federal only. Isn’t the picture the same (proportional drops in Q/Q ) if the other taxes are included? Did I miss something>

  46. [...] Yesterday, we showed the chart of how ugly things had become for Federal Withholding Tax reciepts. [...]

  47. [...] that we CONTINUE to lose jobs every day. This translates to reduced revenues for businesses and government alike, with very far reaching and long term implications, including lower earnings for publicly [...]