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Tuesday, September 13, 2016

Tax Receipt Weakness Deepening Government Deficit

Weakness in tax receipts is deepening the government's deficit which in August totaled $107.1 billion. For the government's fiscal year ending in September, the year-to-date deficit was $620.8 billion. Moreover, calendar timings of payments and receipts are understating the deficit, excluding which the deficit is up 17.1 percent year to date.

Corporate tax receipts were down 13.2 percent year-to-date while individual taxes, by far the larger of the two, edged up 0.5 percent. Total receipts, boosted by gains for employment and retirement receipts, were up 0.9 percent.

Total outlays in contrast are up a more sizable 3.4 percent including increases in net interest payments and social security.


Recent History Of This Indicator:
The red ink in the Treasury budget has been deepening, up a fiscal year-to-date 10 percent to just over $500 billion at last count which was for July. And calendar timings for outlays and receipts have been understating the deficit, adjusted for which the increase in the government's deficit has been approaching 20 percent. Corporate tax receipts have been down sharply while individual tax receipts have been flat. The outlay side of the ledger has been showing sharp increases in net interest payments and moderate increases for social security. The August report will cover the 11th month of the government's fiscal year which ends in September.

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