WASHINGTON (AP) — The federal government recorded a $74.9 billion deficit in June, a month when the government often runs a surplus, as corporate taxes dropped sharply compared to a year ago.
The Treasury Department reported Thursday that the June deficit pushed the imbalance so far this 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 taxes although Democrats have charged that most of the benefits of this reduction will be seen by the 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, which began on Oct. 1, are running 20 percent below the same period a year ago.
Through the first nine months of this calendar year, revenues have totaled $2.54 trillion, an increase of 1.4 percent from the same period a year ago. Government spending has totaled $3.15 trillion, an increase of 3.9 percent from a year ago.
The CBO is projecting that the deficit for the full budget year will be up 19.1 percent from last year’s deficit of $665.8 billion. The CBO projects that the annual deficits will keep rising past the $1 trillion mark in future 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.