The Congressional Budget Office (CBO) now estimates that the federal government received $370 billion in corporate tax revenue in the past year (fiscal year 2021), matching the record high of 2007. It s This is an increase of 75% over the previous year’s total, reflecting a rebound in corporate profits and the economy in general.
Strong corporate tax collections this year challenge efforts by the administration and congressional Democrats to raise the corporate tax rate and raise other corporate taxes based on allegations of relatively low tax recoveries as a result of the Tax Cuts and Jobs Act (TCJA) in 2017. In fact, corporate tax recoveries this year are about 25% higher to the $297 billion collected in 2017, before the passage of the TCJA. Similarly, as a percentage of GDP, corporate tax receipts are higher this year (1.63%) than in 2017 (1.52%).
Additionally, the rebounding economy pushed personal income tax collections to a record high of $2.052 trillion for the fiscal year. Payroll tax revenue was $1.308 trillion, close to last year’s total, and other revenue was $317 billion. In total, federal tax revenue reached $4.047 trillion in fiscal year 2021, an all-time high in nominal terms.
As a percentage of GDP, total federal tax revenue reached 17.8% this year, higher than almost any year (2015 being the exception) since Bush’s 2001 tax cuts, and significantly higher than the 16.3% of GDP that was collected on average between the passage of the Bush tax cuts in 2001 and the TCJA in 2017.