Against all odds — namely, "a pandemic, a recession, and a slew of tax cuts" — federal tax receipts are in fact "booming," writes Politico.
More specifically, revenues saw their biggest one-year increase since 1977, after having surged 18 percent in the fiscal year that just ended, per Politico.
"They are just booming," said Mark Booth, a former top revenue forecaster at the nonpartisan Congressional Budget Office. "It is very unusual."
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That boom translates into $627 billion more in revenues than in 2020, per the CBO, which also estimates this to be the first time "total government revenues topped $4 trillion," writes Politico.
Usually, tax receipts "crash" following an economic downturn — if Americans' incomes lessen, so does what they owe to the Treasury. This time, however, "it's the opposite," said Booth; considering the pandemic's "bifurcated" economic toll, high earners, who pay most federal taxes, are doing better than their lower-earning counterparts.
The uncommon, double-digit jump arrived despite a series of pandemic-related tax cuts, notes Politico, and was an anomaly compared to 2019 levels, as well, even before the novel coronavirus upended day-to-day life across the globe. Increases were seen across all major tax categories, per the CBO, "with corporate receipts seeing the biggest jump, thanks to better-than-expected profits."
In July, "CBO predicted receipts in 2022 would amount to 18.1 percent of GDP, the most in 20 years," writes Politico. "Now it seems like the agency will have to revise that too upwards."
