Arkansas Democrat-Gazette

Budget deficit for June hit $74.8B

U.S. corporate tax collection­s off sharply, Treasury reports

- MARTIN CRUTSINGER

WASHINGTON — The federal government recorded a $74.86 billion budget deficit in June, a month when the government often runs a surplus, as corporate tax collection­s dropped sharply compared with a year ago.

The Treasury Department reported Thursday that the June deficit pushed the imbalance so far this budget year to $607.1 billion, 16.1 percent higher than the same period a year ago.

The Congressio­nal Budget Office is forecastin­g that the deficit for the entire budget year will total $793 billion, reflecting in part the impact of the $1.5 trillion tax cut that Congress approved in December plus increases in government spending lawmakers approved earlier this year.

Treasury’s monthly report showed that revenue from corporate tax payments totaled $41 billion in June, a month when corporatio­ns make quarterly payments, down $20 billion from a year ago.

The tax-overhaul bill that President Donald Trump pushed through Congress late last year fulfilled a longtime Republican goal of cutting the corporate tax rate. It reduced the rate from 35 percent to 21 percent, although most corporatio­ns used various methods to reduce the actual rate they paid under the previous law below the 35 percent figure.

The tax legislatio­n also cut individual tax rates although Democrats have asserted that most of the benefits of this reduction are being seen by the nation’s wealthiest taxpayers rather than middle-class taxpayers.

The government has run a surplus in June in all but 12 of the past 64 years because it is a month when quarterly tax payments are due from both corporatio­ns and individual­s. The new report showed that corporate tax payments fell by 33 percent from a year ago and so far this budget year are running 20 percent below the same period a year ago.

Through the first nine months of this calendar year, revenue has totaled $2.54 trillion, an increase of 1.4 percent compared with the same period a year ago. Gov- ernment spending has totaled $3.15 trillion, an increase of 3.9 percent from a year ago.

The Congressio­nal Budget Office is projecting that the deficit for the full federal budget year will be up 19.1 percent compared with fiscal 2018’s deficit of $665.8 billion. The budget office is projecting that annual deficits will rising past the $1 trillion mark in future budget years, reflecting the impact of the 10-year tax cut coupled with rising costs for Social Security and Medicare as more baby boomers reach retirement age.

Accumulati­ng budget deficits add to the overall federal debt, which totaled more than $21.2 trillion as of Wednesday. That figure includes more than $5.6 trillion the government owes itself, including about $2.8 trillion borrowed from the Social Security Trust Fund, according to Treasury Department reports.

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