How Government Made an Extra $57 Billion in 2010

The 2010 fiscal year is over, and the federal deficit is only $1.3 trillion. Income tax revenue fell, and payroll tax revenue fell. But the government made an extra $57 billion. That's a lot of money, kind of! Where did it come from? Corporate profits and the Fed, says Bob Williams at the Tax Policy Center.

Year-over-year revenue changes were highly uneven, however. Corporate income taxes jumped about 40 percent to $192 billion--up $54 billion from 2009--largely because profits rose but also because temporary provisions allowing firms to depreciate assets more rapidly expired. (Congress extended accelerated depreciation retroactively in September, but any tax savings won't come until FY2011.) Federal Reserve receipts jumped more than 120 percent ($42 billion) on the Fed's greatly expanded investment portfolio, mostly acquired to boost the economy and prop up the ailing housing market.
We're still down $400 billion from tax revenues in 2007, which is about one-third of our deficit. If you forecast where 2010 tax revenue would have been without a recession, you'd find that depressed taxes made up closer to half of our deficit.


Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

The Case for Napping at Work

Most Americans don't get enough sleep. More and more employers are trying to help address that.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

The Case for Napping at Work

Most Americans don't get enough sleep. More and more employers are trying to help address that.

Video

A Four-Dimensional Tour of Boston

In this groundbreaking video, time moves at multiple speeds within a single frame.

Video

Who Made Pop Music So Repetitive? You Did.

If pop music is too homogenous, that's because listeners want it that way.

Video

Playing An Actual Keyboard Cat

A music video transforms food, pets, and objects into extraordinary instruments.

Video

Stunning GoPro Footage of a Wildfire

In the field with America’s elite Native American firefighting crew

Video

The Man Who Built a Forest Larger Than Central Park

Since 1979, he has planted more than 1,300 acres of trees.

More in Business

Just In