The federal government ran a budget deficit of $301 billion for the first seven months of fiscal year 2014, CBO estimates—$187 billion less than the shortfall recorded in the same span last year. Revenues were about 8 percent higher and outlays about 3 percent lower.
Total Receipts: Up by 8 Percent in the First Seven Months of Fiscal Year 2014
Receipts for the first seven months of fiscal year 2014 totaled $1,735 billion, CBO estimates—$132 billion more than receipts in the same period last year. That increase is $10 billion to $20 billion less than what CBO expected when it published its most recent projections in its April 2014 report Updated Budget Projections: 2014 to 2024.The largest increases from the same period last year were the following:
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Individual income taxes and social insurance (payroll) taxes together rose by $94 billion, or 7 percent.
- Increases in amounts withheld from workers’ paychecks—amounting to $76 billion (or a 7 percent increase)—accounted for most of that gain. Besides growth in wages and salaries, changes in law contributed to the increases: The tax rates in effect from October 2013 through December 2013 (the first quarter of fiscal year 2014) were higher than those in effect from October 2012 through December 2012 because of two changes that occurred in January 2013—the expiration of the 2 percentage-point payroll tax cut and increases in tax rates for income above certain thresholds. Collections of withheld taxes are running about $20 billion above CBO’s expectations, much of that coming around the beginning of the calendar year and probably reflecting onetime factors, such as year-end bonus payments.
- Nonwithheld receipts rose by $19 billion (or 5 percent), about $30 billion less than the increase that CBO had anticipated. Those receipts reflected payments made for both the 2012 and 2013 tax years. Part of the increase came from payments made during the tax-filing season (February through April), most of which were final payments for the preceding tax year; they increased by $6 billion (or 2 percent). However, income tax refunds also rose—by $2 billion (or 1 percent).
- Receipts from corporate income taxes rose by $20 billion (or 15 percent). Of that increase, $17 billion occurred between October and March and is probably attributable, for the most part, to growth in taxable profits in calendar year 2013.
- Receipts from the Federal Reserve rose by $16 billion (or 37 percent). The increase was due in part to the central bank’s larger portfolio of securities and a higher yield on that portfolio. Almost all of the increase occurred from January through April. Gains would also have occurred from October through December of the current fiscal year if the Federal Reserve had not realized capital gains on sales of Treasury securities during that period in the previous fiscal year.
