Finally, Some States See Growth in Tax Revenues

Online, July 26, 2010 (Newswire.com) - In his March 17, 2010 blog, noted financial advisor Dennis Tubbergen stated a gauge for economic recovery is tax revenues. In a healthy economy, tax revenues rise as a result of increased consumer spending. Finally, after almost two years of watching tax revenues plunge, some states are seeing positive numbers again. According to a CNNMoney.com article on July 13, 2010, state tax revenues rose 2.5% in the first quarter of this year. The article goes on to state most of this gain was due to tax hikes in New York and California, some 33 states still reported tax declines, and preliminary data for April and May show that the second quarter will likely be weaker.

Tubbergen, who is CEO of USA Wealth Management, LLC, has an online financial blog and gives monthly updates on the economy and the major U.S. markets in his newsletter Moving Markets. Earlier this year, Tubbergen discussed how tax revenues and a state's economic recovery are directly related.

Tubbergen quotes Gary Shilling from Shilling's March edition of his Insight newsletter: Personal taxes account for a minimum of one-third of total tax revenue in 28 states and exceed sales taxes in 25 states. Many states get about 55% of their revenue from these three sources - personal state taxes, corporate taxes and sales taxes.

"With unemployment up, tax revenues are down but expenses haven't followed suit," notes Dennis Tubbergen, who believes an improvement in the jobs market outlook would help both at the state and municipal levels. Tubbergen states growth in jobs would mean growth in tax revenues, and an increase in tax revenues would assist all levels of government in meeting their financial obligations.

"Until the excess debt in the system and unfunded liabilities of government are dealt with, full and robust economic recovery, in my opinion, cannot occur," concludes Tubbergen. "I'm looking for financial markets to come to grips with this fact soon."

For more information on Dennis Tubbergen's views, visit www.dennistubbergen.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.