WASHINGTON (MaceNews) – The official U.S. budget deficit in December was $13.3 billion and after adjustment for some calendar quirks affecting benefit payments was $40 billion, both close to last year’s totals, and striking was how the surge in corporate tax revenues that began in June is continuing, the Treasury Department reported Monday.
For the fiscal year to date covering November and December the official deficit was $357 billion, 12% wider than the same period in the 2019 fiscal year. After adjustments it was $336 billion.
Corporate tax revenue for the two months is running 20% higher than the last fiscal year and even after subtracting refunds, up 5%, were well above the pace of 5% for all of FY 2019. A surge in corporate revenues began in June, jacking up revenues between then and the end of the fiscal year, September, by 45%.
Up until then corporations had been posting declines in tax payments while individuals were seeing increases after the passage of the 2017 tax cuts. In the latest report individual tax revenues were up 6% above for the same period last year.
Treasury officials had always maintained that corporate tax collections would accelerate after full provisions of the new tax law became effective despite some signs that corporate tax counsels had found unanticipated loopholes that they were aggressively pursuing.
The latest report showed tariff collections on U.S. importers continue their strong acceleration, up 27% above the first two months of the 2019 fiscal year to $22 billion.
Low interest rates continue to benefit Treasury in its payment of interest on the public debt, 2% less for November and December at $160 billion.
Medicare benefits are running 8% higher for the two months, Medicaid 5% higher and other benefits 14% higher. Social Security payments were up 6%
Fiscal 2019’s monthly deficits accumulated to $984 billion for all of last year and may top $1 trillion this year. After the financial crisis, the deficit totaled a record $1.4 billion in 2009. Now the Congressional Budget Office sees the deficit adding $1 trillion or more each year the rest of the decade, to 95% of GDP in 2029 compared to the current 79%.