An April Shower of Tax Revenue

More evidence that tax cuts actually increase government receipts......

Soaring Treasury receipts signal a far smaller than expected U.S. budget deficit for fiscal year 2006.

All the daily data for receipt of tax payments by the U.S. Treasury for the key month of April are now available, and the results speak for themselves: By our estimates at Action Economics, April receipts soared at a 15% year-over-year rate. This is well in excess of the 2% year-over-year growth in outlays, which were depressed by a "pull ahead" of some spending into March because of calendar effects.

The April data signal that the fiscal 2006 U.S. budget deficit is on track to reach the vicinity of our $270 billion forecast, despite official and market forecasts that are all nearly $50 billion to $150 billion higher. A shortfall of this magnitude in the U.S. budget deficit from official forecasts by the Congressional Budget Office (CBO) happens with remarkable consistency in healthy "middle years" of business expansions, and it's happening again.

Now let's just make them permanent.