Record Revenues Strengthen Bush's Hand On Tax Cuts

by Mike Godfrey, Tax-News.com, Washington

12 May 2006

Federal revenues surged in April, with corporate tax receipts hitting a record $46 billion, reflecting the strong economy and the success of President Bush's tax cutting policies, Treasury Secretary John Snow stated on Wednesday.

In its monthly accounting of the government's books, the Treasury Department announced that revenue for the month totaled $315.1 billion as Americans filed their tax returns by the April deadline - 13.4% higher than April 2005 and the largest one-month receipt total since 2001.

Government receipts totaled $1.35 trillion in the first seven months of the fiscal year, up 11.2% compared with the same period last year.

"What this all this means is we remain on track to meet the President's goal of cutting the deficit in half by 2009," observed Snow.

The Congressional Budget Office recently revised down its projections for the 2006 federal deficit to an estimated $300 billion, from its previous estimate of $350 billion.

Snow added that the latest set of figures "confirms what the President and this administration have been saying all along; tax relief will spur business investment, job growth and higher wages, all of which will lead to increased tax revenues for reducing the deficit".

The Treasury Secretary also commended Congress for approving the $70 billion tax reconciliation bill, which will provide for further tax relief by, among other measures, extending dividend and capital gains tax cuts for an additional two years to the end of 2010, and limiting the reach of the Alternative Minimum Tax on middle income taxpayers for another year.

"I commend the House and Senate tax negotiators for finalizing this package that will help to ensure continued economic prosperity for the American people. Lower tax rates on investment are at the heart of America's economic recovery and expansion, and I'm pleased to see that investors can now plan on those lower rates for the coming years," he observed.

The tax package was approved by the House of Representatives on Wednesday, and it is expected to receive Senate approval by the end of the week.

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