The Congressional Budget Office (CBO) now estimates that the U.S. federal government received $ 370 billion in corporate tax revenue last year (fiscal year 2021), even surpassing the record of 2007. This is a 75% increase over the previous year’s total, reflecting a rebound in corporate profits and the economy in general.
This year’s robust corporate tax collection calls into question the efforts of the Biden Administration and Congressional Democrats to increase taxation of homeland companies based on the excuse of low collection promoted by the Tax Cuts Act. and Jobs (TCJA) signed by former President Donald Trump and Republicans in 2017.
In fact, the collection of corporate tax during fiscal year 2021 is approximately 25% higher than the 297,000 million dollars collected in 2017, before the approval of said tax reform. Likewise, as a proportion of GDP, corporate tax collection was higher in 2021 (1.63%) than in 2017 (1.52%).
In addition, the recovery of the economy has pushed the collection of personal income tax to an all-time high of $ 2.05 trillion in the fiscal year. Payroll tax revenue stood at $ 1.30 trillion, close to last year’s total. Other revenue was $ 317 billion. In total, federal tax revenue reached $ 4.04 trillion in fiscal 2021, an all-time high in nominal terms.
As a share of GDP, total federal tax revenue reached 17.8% in 2021, which is higher than almost any year (2015 being the exception) since the George W. Bush tax cuts in 2001 and substantially higher. higher than the 16.3% of GDP that was collected on average between the approval of these tax cuts and those approved in 2017.
Currently, the Biden Administration and Democrats in Congress finalize an additional spending package on social programs that would initially cost $ 3.5 trillion. A figure that sought to finance itself with tax increases for companies and higher incomes. Measures Republicans Oppose. Some moderate Democratic senators are also resisting, such as Joe Manchin and Kyrsten Sinema. Without their support, budget reconciliation, the process that Democrats have chosen to pursue in order to proceed without the support of the opposition, requires the full backing of the Democratic caucus, especially in the Upper House.
Manchin has said that he will only support additional spending reaching $ 1.5 trillion. Negotiations are currently continuing on Capitol Hill, where House Speaker Nancy Pelosi set October 31 as the deadline to approve the reconciliation and infrastructure bill.