Domestic Taxes

Tax revenue up 14 percent this year, CBO says

by Erik Wasson 07/09/13 05:23 PM ET

The $263 billion increase in individual, payroll and corporate tax receipts was the driving force behind a rapidly shrinking deficit.

{mosads}The latest budget estimate comes as the White House and Congress are positioning themselves for a deficit showdown in the fall. House Republicans are preparing deeper immediate spending cuts while President Obama is arguing for a “balanced” approach that includes higher taxes.

From October through June, the federal government ran a deficit nearly $400 billion smaller than that in the comparable period of 2012. The deficit was $512 billion compared to $904 billion, the CBO said.

On New Year’s Day, Congress allowed individual tax rates on families making more than $450,000 to rise and for a 2-percentage point holiday in social insurance payroll taxes to expire. Net corporate receipts rose 17 percent or $29 billion due to a stronger economy.

Spending is down 4 percent or $129 billion compared to the first nine months of fiscal 2012.

For June itself, the government recorded a surplus of $115 billion, compared to a deficit of $60 billion.