Agency Sees Record Corporate Tax Receipts
Corporate tax receipts this year will probably cross the $300-billion threshold for the first time, boosting efforts to trim the U.S. budget deficit, the Congressional Budget Office said.
The budget agency, in its monthly review released Friday, estimated that corporate receipts would exceed $330 billion in fiscal 2006, up 18% from 2005. That is double the increase that the agency estimated at the beginning of the government’s fiscal year, which ends Sept. 30.
The White House Office of Management and Budget is expected to announce Tuesday that, because of the increased tax receipts, the deficit will be about $100 billion less than what was projected six months ago. President Bush pledged in his 2004 State of the Union address to halve the deficit by 2009.
“We are on track to meet the president’s goal,” said Rob Portman, White House budget director.
Congressional analysts say the deficit could drop this year to $300 billion, down from $318 billion in 2005 and from an all-time high of $412 billion in 2004.
A smaller deficit might give Republicans ammunition to rebut criticism of their economic policies ahead of the November congressional elections and to deflect arguments that U.S. fiscal policy risks hurting the global economy.
The Congressional Budget Office said federal spending through June was 8.6% higher than in the first nine months of fiscal 2005. It attributed much of the increase to Katrina and Rita recovery efforts, interest on the public debt, and the Medicare prescription drug plan.
The Treasury is drawing an increased share of its revenue from corporations, with companies providing 13% of total tax revenue in fiscal 2005, up from 10% in 2004 and from about 7% in 2003.
Individual tax payments, which make up the bulk of the government’s tax revenue, total an estimated $791 billion so far this year, up about 14.1%, the Congressional Budget Office said.