The U.S. Treasury posted a surplus in April as tax payments soared 22% from a year earlier. The federal government is expected to post a deficit of more than $1.5 trillion this year.
Al Drago/Getty Images
hide caption
toggle caption
Al Drago/Getty Images
The U.S. Treasury posted a surplus in April as tax payments soared 22% from a year earlier. The federal government is expected to post a deficit of more than $1.5 trillion this year.
Al Drago/Getty Images
The U.S. Treasury posted a surplus last month thanks to the April 15 tax deadline. However, the federal government is still expected to end the fiscal year with a deficit of more than $1.5 trillion.
Tax revenues totaled $776 billion in April, an increase of 22% from a year ago. Treasury officials attribute some of the jump to more people working and higher wages.
Government spending rose 23% that month from a year ago, with the largest increase coming from $26 billion in higher interest payments on the federal debt. Interest payments are increasing as a result of both increased debt and today's high interest rates.
government spending exceeds revenue
Seven months into the government's fiscal year, federal spending has exceeded tax revenue by $855 billion. The budget deficit has so far shrunk by 8% compared to this time last year, but is still significantly large for a country with a strong economy and an unemployment rate below 4%.
Speaking at the Brookings Institution on Friday, White House economic adviser Lael Brainard blamed much of the budget deficit on the 2017 tax cuts.
“The Trump and Bush tax cuts and their extensions increased the national debt by $10 trillion, accounting for 90% of the non-emergency debt-to-GDP increase since 2001,” Brainard said. National Economic Council.
Most of the 2017 tax cuts are set to expire next year, and are likely to be challenged in Congress. Republicans want to extend the tax cuts while also providing further tax relief to corporations and the heirs of wealthy people. President Biden wants to raise the corporate tax rate from 21% to 28%, while extending the tax cut for people making less than $400,000.
The Joint Committee on Taxation estimates that extending the 2017 tax cuts would increase the budget deficit by more than $5 trillion over the next 10 years.
