A July 12, 2015 photo shows the US Treasury in Washington, DC.
WASHINGTON—Corporations taking advantage of new, lower tax rates reduced their payments to the federal government last month.
The Treasury Department on Thursday said government receipts fell 7% in June compared with the same month a year earlier, including a 33% drop in gross corporate taxes. Individual withheld and payroll taxes were down 5% from June 2017, while non-withheld individual taxes rose by 7%.
Even though revenues fell, the budget deficit narrowed to $74.86 billion in June, compared with $90.23 billion in June 2017, due to a 9% drop in government outlays. The spending decline largely reflected some accounting shifts and not actual spending changes. For instance, the Education Department revised estimates for the net costs of past loans and loan guarantees, according to a Congressional Budget Office analysis.
More broadly, the federal deficit is swelling as government spending outpaces revenues. The budget gap totaled $607.1 billion in the first nine months of the 2018 fiscal year, 16% larger than the same point a year earlier. So far in the current fiscal year, which will end Sept. 30, total spending rose 4% compared with the same period a year earlier and total revenues rose 1%.
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