By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – In many instances, numbers can illustrate a story better than words. Follow along in the cases of the national and state deficits, and you'll see what I mean. I'm Maxine Shapiro with KERA Marketplace Midday.
It is now projected - for the current fiscal year - the U.S. budget deficit will be a little higher than previously predicted. $150 billion higher, making it the largest shortfall ever! A $455 billion deficit. It beat the previous record of $290 billion by one big chunk of change. That illustrious stat was held by the Bush administration in 1992. Another way of looking at it: this year's deficit represents 4.2% of the total economy. Not quite where it was in 1983, under the Reagan administration, when the deficit represented 6% of the total economy.
So here we are, the national budget is at a record deficit while state budgets are nearing them. I guess the good news for Uncle Sam is that unlike the state budgets, which must be balanced, there's no federal law reigning in the national budget. But a new study from the Multistate Tax Commission reveals, state deficits would not have been that high if it weren't for those dubious corporate tax shelters. States would have received 35% more tax revenue in 2001 if it weren't for creative accounting. Tax sheltering as used in this study refers to the reduction of "tax payments to states below what would occur if each corporation calculates its net income through methods reviewed and approved by federal or state tax authorities." The hardest-hit state in terms of dollars was California. They lost an estimated $1.34 billion. Illinois was next, followed by the big state of Texas, where $607 million were lost to the big loophole in the sky.
I believe the numbers speak for themselves. For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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