Tax season ended last month, and tax revenues did not come in.

I've said that I was concerned over what looked like a revenue shortfall for the Federal Government, but that I was going to wait until tax season ended and the April figures came in.

The Congressional Budget Office reported those numbers as part of their monthly budget review, and I am now concerned.

Total Receipts: Down by 10 Percent in Fiscal Year 2023
Receipts totaled $2.7 trillion during the first seven months of fiscal year 2023, CBO estimates— $299 billion (or 10 percent) less than during the same period a year before.

Receipts collected through April 2023, net of refunds, were about $250 billion less than CBO anticipated in February, when the most recent baseline projections were released. That decrease stems mainly from smaller-than-anticipated payments of individual and corporate income taxes, mostly for calendar year 2022. The reasons for the difference will be better understood as additional information becomes available, but one reason could be lower-than-expected realizations of capital gains last year.

Receipts ended up being $250 billion less than what was expected in February? UGH!

As you can see, the budget deficit for the 2023 Federal Fiscal Year started getting much larger than 2022's deficit in January, when tax brackets were indexed to account for 2022's high inflation , and the fiscal results from the tax-filing months of February, March and April ended up being very different compared to last year.

The same budget review also shows that the taxes withheld from paychecks are slightly higher, but it's the refunds and lack of payments that are blowing the hole in the revenue projections.

Amounts withheld from workers’ paychecks increased by $45 billion (or 2 percent). Those taxes are withheld from wages and salaries, including bonus income; the amount withheld depends on a taxpayer’s expected tax bracket.

• Nonwithheld payments of income and payroll taxes declined by $190 billion (or 23 percent) compared with the same period last fiscal year. That decline began in January and continued through tax-filing season, mostly reflecting a decrease in 2022 tax liabilities.

The spending side also is contributing to the deficit, even with the end of the expanded Child Tax Credit, with the Fed's decision to continue jacking up interest rates continuing to increases costs to pay off our debt.

The Medicaid costs will likely decline with the end of continuous enrollment and tens of millions of recipients having their status re-evaluated, and the Department of Education number will decline because it expensed all of the student loan relief into this year (which doesn't reflect the real change and benefits over time).

The deficit numbers are certainly worth discussing, especially with the revenue shortfall. But as I've said before, deficits only are an economic problem if it results in higher interest rates or a drop in the dollar that results in inflation. And I'd argue the higher interest rates have been artificially induced higher by the Fed more than any lack of desire to invest in US Treasuries, while inflation peaked when the deficit was lower in June 2022, and CPI has since moderated into a manageable 4% annual rate since then.

And even as GOPs trying to use the artificial debt ceiling to tank the economy, the US dollar has stayed strong, with the dollar index being stronger than it was when 2022 began, and well above where it was when the Biden stimulus became law in March 2021.

These deficit figures may be used by Republicans as their excuse to try to cause immediate budget cuts via the debt ceiling debate. But we've already allotted funds for those bills to be paid until September, and hack politicians don't decide if the Treasury can issue debt to pay those bills - the Treasury and the financial markets do. We can discuss what adjustments need to be made to the 2024 budget in August and September to deal with the increasing deficit, if you think it is a problem to deal with.

When those discussions happen, we better discuss ways to grow our flagging tax revenues. And that better include a look at the 2017 GOP Tax Scam that has a sizable role in our growing deficits and debt. Or else we're not being honest about why we're in this situation.