·
The U.S. federal government's budget deficit in November fell to $75.6B
versus a deficit of $83.1B last November. That pulled the figure for the
first two months of FY07 to $124.9B against $130.3B during last fiscal
year's first two months. The Congressional Budget Office expects the FY
2007 deficit to total $286B, up slightly from last year's deficit of
$247.7B.
· As a percentage of GDP, the U.S. budget deficit fell last year to 1.9% from 2.6% in FY2005.
· Net revenues grew 8.8% y/y during the first two months of FY07. Individual income tax receipts (44% of total receipts) grew 11.8% as withheld taxes rose 9.7% due to employment growth and non-withheld taxes (primarily on capital gains) surged 45.8%. Corporate income taxes (13% of total receipts) surged 21.5% as corporate profits grew. Estate & gift taxes fell 1.1% while higher employment levels raised social insurance & retirement receipts by 4.2%.
· U.S. net outlays grew 4.7% during this fiscal year's first two months versus last year. Defense spending (19% of total outlays) grew 13.6% and Medicare expenditures (12% of outlays) surged 42.5%. Social security spending (21% of outlays) rose 6.0% but the recent bond market rally dropped the government's interest expense by 11.0% y/y.
· Middle-Income Tax Rates: Trends and Prospects from the Federal Reserve Bank of Kansas City can be found here.