Surprising Jump in Tax Revenues Is Curbing Deficit

Discussion in 'Politics' started by saxon, Jul 9, 2006.

  1. saxon

    saxon

    By EDMUND L. ANDREWS
    New York Times, Published: July 9, 2006

    WASHINGTON, July 8 — An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.

    Tax revenues are climbing twice as fast as the administration predicted in February, so fast that the budget deficit could actually decline this year.

    The main reason is a big spike in corporate tax receipts, which have nearly tripled since 2003, as well as what appears to be a big increase in individual taxes on stock market profits and executive bonuses.

    On Friday, the Congressional Budget Office reported that corporate tax receipts for the nine months ending in June hit $250 billion — nearly 26 percent higher than the same time last year — and that overall revenues were $206 billion higher than at this point in 2005.

    Congressional analysts say the surprise windfall could shrink the deficit this year to $300 billion, from $318 billion in 2005 and an all-time high of $412 billion in 2004.
     
  2. The printing presses at the fed must be running 24/7