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TAX RATES ARE UP, BUT RECEIPTS ARE WAY DOWN
The pickup in economic activity that apparently began last quarter has not bolstered federal tax receipts. Indeed, economists Gert von der Linde and Richard F. Hokenson of Donaldson, Lufkin & Jenrette Securities Corp. point out that total federal revenues started exhibiting "an ominous decline" in May and June, falling 8.1% and 6.5% from their year-earlier levels. The drop occurred despite a sizable rise in tax rates that was legislated last fall.
The two economists note that individual income-tax receipts have been declining on a year-over-year basis since December and are down 1.1% for the first nine months of fiscal 1991, compared with the Administration's projection of a 5.5% increase last February. And total receipts from all sources are now running only 1.5% over fiscal 1990, an anemic rate of gain that, if maintained, will produce a $45 billion gap between actual and originally projected levels for fiscal 1991. In fact, von der Linde and Hokenson expect the shortfall to be much larger because it has been growing steadily all year.GENE KORETZ