Friday, January 18, 2008
Crunching Moves Into High Gear
The Rockefeller Institute published its third quarter 2007 state tax data. The summary is here. It looks like we moved into the cycle of reinforcing negatives between second quarter and early third quarter. It explains a lot, and it does compare pretty closely with what I already had.
I was surpised by just how crummy the state tax receipts really were. Inflation-adjusted, personal and corporate income plus sales taxes shrank in the third quarter. That normally will not happen until we are a little ways into a recession, because income taxes lag, i.e., are paid on previous income rather than current income.
FWIW, the inflation adjustment Rockefeller uses is the state and local government expenditures index, which is definitely closer to reality than CPI.
Tom, at this point any economist who's not drunk or stoned really knows that the economy is sliding fast.
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