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Monthly Budget Review for May 2014

“The federal government ran a budget deficit of $439 billion for the first eight months of fiscal year 2014, CBO estimates—$188 billion less than the shortfall recorded over the same span last year and the smallest deficit for those months since fiscal year 2008. Compared with the amounts at this point last year, revenues were about 7 percent higher and outlays about 2 percent lower.  Total Receipts: Up by 7 Percent in the First Eight Months of Fiscal Year 2014 – Receipts for the first eight months of fiscal year 2014 totaled $1,935 billion, CBO estimates—$135 billion more than receipts in the same period last year. The largest increases were the following:

  • Individual income taxes and social insurance (payroll) taxes together rose by $94 billion, or 6 percent.
    • Increases in amounts withheld from workers’ paychecks—$76 billion (or 6 percent)—accounted for most of that gain. Besides growth in wages and salaries, changes in law contributed to the increases: The tax rates in effect from October 2013 through December 2013 (the first quarter of fiscal year 2014) were higher than those in effect from October 2012 through December 2012 because of two changes that occurred in January 2013. Namely, the 2 percentage-point payroll tax cut expired, and tax rates for income above certain thresholds increased.
    • Nonwithheld receipts rose by $19 billion (or 5 percent), reflecting payments made for both the 2012 and 2013 tax years. Income tax refunds fell by $1 billion (or 1 percent), further boosting receipts.”

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