Federal tax receipts see biggest one-year jump since 1977 despite pandemic

Federal tax receipts see biggest one-year jump since 1977 despite pandemic
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Federal tax receipts saw the biggest one-year increase since 1977, according to the nonpartisan Congressional Budget Office (CBO).

Receipts topped $4.04 trillion during fiscal 2021, up $627 billion from the $3.42 trillion that the government received in fiscal 2020, according to the CBO’s Monthly Budget Review for September.

The increase is also over the same period in 2019 when receipts reached $3.46 trillion before declining in 2020.

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The CBO said the change reflects “the general strength of the economy over the past year.”

The report was first reported by Politico, which noted that taxes saw the biggest one-year increase since 1977. The outlet also noted that it was the first time that government revenues topped $4 trillion.

It’s unusual for the government to see a large jump in revenues amid an economic downturn because people tend to owe less as incomes fall during the pandemic, Politico noted. But during the pandemic, higher-income people were better off than those who earned less.

Corporate taxes saw the largest jump, increasing by 75 percent over the same period last year to $370 billion, according to the CBO’s report. The CBO attributed this partially to higher corporate profits this year.

Individual income taxes and payroll taxes rose by a collective 15 percent. Individual income taxes alone saw a 27.5 percent increase, while payroll taxes saw a slight, 0.2 percent decline.

The amounts withheld from workers' paychecks rose by $244 billion. The CBO attributed the change to higher total wages and salaries, notably among relatively high-income workers who are paying higher tax rates on their earnings.