The Office of Debt Management at Treasury has released another fascinating set of charts about the government’s finances and debt outlook. One that particularly caught my eye was this depiction of the collapse in tax revenues:
Fittingly, the red lines represent the current fiscal year.
As you can see, corporate income taxes are lagging far behind the pace of recent years, as are non-withheld individual tax payments (those payments typically stem from capital gains, other investment income, and business income rather than regular wages and salaries).
Refunds have also increased (denoted by a larger negative figure — i.e., larger cash outflows). Refunds also spiked in the middle of last year due to the first economic stimulus.
the corporate tax number looks incredibly anemic. what’s up with that?
CBO’s latest monthly budget report describes the decline in corporate tax revenues as the result of three factors:
* weakness in corporate profits,
* more-rapid depreciation (as allowed in recent legislation)
* the ability to use current-year losses to reduce tax liabilities from previous years.
Sort of a triple whammy for corporate tax receipts.