US Announces Record Corporate Tax Haul

by Mike Godfrey, Tax-News.com, Washington

20 September 2006

US corporate tax receipts hit another record high in the third quarter, reflecting the strength of the US economy and the positive effects of President George W. Bush's tax policies, the Treasury Department announced on Monday.

According to a statement by Treasury Under Secretary for Domestic Finance, Randal K. Quarles, corporate tax receipts on Friday's quarterly payment date again reached a record high, with gross receipts on that day the highest ever recorded in a single day in US history, at $85.5 billion. This is 20% higher than receipts on the same quarterly tax payment date last year.

"This revenue growth comes in receipts that were already increasing substantially as a result of the President's economic policies," Quarles said.

"Last year's tax receipts were also a record high, having grown $275 billion, 14.6%, from the previous year. At this point in the year, overall tax receipts are running 11.7% higher than last year," he added.

The figures are good news for the Bush administration, which has pledged to substantially cut the federal deficit.

The Congressional Budget Office projects a deficit of $260 billion for fiscal year 2006, about $111 billion less than it estimated in March for the President’s budget, largely as a result of revenues from unexpectedly strong corporate profits. Analysts believe that the government is on track to hit this target.

"Strong revenue growth, together with fiscal restraint, is critical to deficit reduction," Quarles noted.

"As today's announcement shows, we are firmly on the path to meeting the President's goal of cutting the deficit in half ahead of schedule," he added.

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