Monday, August 13, 2007

Record Tax Receipts, Shrinking Budget Deficit

Surging, record tax receipts of $2.116 trillion continued to shrink the federal deficit through the first 10 months of the fiscal year, the Treasury Department reported last Friday (see middle chart above).

Since Oct. 1, when the fiscal year began, the government has run a deficit of $157.3 billion, sharply narrower than the $239.6 billion in the year-earlier period. The White House predicts that the deficit this year drop to $205 billion, which will be the lowest deficit in 5 years, both in absolute dollars, and as a percent of GDP (see bottom chart above).

According to the WSJ, "So far this year, individual income taxes are up 11.4% to $965 billion (see top chart above), with much of the increase stemming from taxes on investments and other sources of income more important to the wealthy. Receipts from these so-called nonwithheld taxes are up 13.5% so far this year. Corporations also helped to fill the coffers, with corporate tax receipts up 10.5% so far this year to $289 billion."

MP: What happened to the "tax cut for the rich?" Aren't these data more consistent with a "tax hike for the rich?"

3 Comments:

At 8/13/2007 10:56 AM, Blogger juandos said...

I'm shocked that the neither the New York Times or the L.A. Times is reporting this, "shrinking budget deficit"...

I also didn't see this in the Detroit News or the Detroit Free Press either...

Also the local paper, the St. Louis Post-Dispatch didn't see fit to report this bit of good news...

Agenda driven news maybe?

 
At 8/13/2007 12:02 PM, Blogger Walt G. said...

Isn't that somewhat like a company bragging they did not lose as much money this year as they did last year? I don't think my banker or financial planner would be impressed with that type of news. Businesses declare bankruptcy over much better situations than that.

Budgets are roughly forecast using dubious accounting procedures that would send corporate accountants to jail, so budget makers can time their newsworthiness without question (Social Security is supposed to be OFF BUDGET!). That’s why the estimates vary so widely by the source. Some forecasts are more official than others, but they are not necessarily more accurate. If the budget had been forecast as a deficit of $200 billion this year, the news would have been good last fall and bad now. It’s all about the spin.

Yes, it’s a glimmer of good news after a good spin; however, we must keep in mind that just the interest on the national debt is still the third largest item in the budget behind social programs and defense. I’m not ready to give the folks in Washington a round of applause, yet: Are you?

 
At 8/25/2007 1:28 PM, Blogger juandos said...

Well walt g if budget deficits really were a problem wouldn't we as a nation get rid of the entitlement programs ?

After all what part of the Constitution mandates welfare ?

 

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