CBO budget stuff shows deficit was dropping before Tax Scam 2.0 shows up on books

As tax filing season starts, the Congressional Budget Office got their monthly update on how the federal budget is doing. So 4 months in, what do the numbers look like?

That's quite an increase in revenues. What's behind that?

Individual income and payroll (social insurance) taxes together increased by $124 billion (or 9 percent).
• Nonwithheld payments of income and payroll taxes increased by $77 billion (or 33 percent) relative to payments in the same period in fiscal year 2025. Amounts collected so far this year consist of estimated payments of 2025 taxes and final payments of 2024 taxes that were made after the end of the 2024 filing season.
• Amounts withheld from workers’ paychecks rose by $42 billion (or 4 percent), a reflection of rising wages and salaries.
• Individual income tax refunds were $7 billion (or 15 percent) less than during the same period in 2025, boosting net receipts. Most refunds typically are paid during the period from February through May.

Before you say "the newest tax cuts are working!", I'll remind you that we haven’t seen the effect of GOP Tax Scam 2.0 show up much in income tax revenues. That won’t happen until the refunds come in for the next few months, because the Feds are still withholding taxes at pre-Tax Scam 2.0 levels. It's the jump in non-withheld payments that has led to an overall increase in money coming in, and it reflects the continued growth in the stock market that we saw in 2025 (Uncle Sam is not caring if it makes sense for the market to go up).

But we are seeing the difference from Trump 2.0 when it comes to the other main sources of government revenues.

■ Customs duties, including tariff revenues, collected this year were more than four times the amount recorded in the first four months of last year, an increase of $90 billion.

■ Receipts from corporate income taxes decreased by $22 billion (or 16 percent). The enactment of the 2025 reconciliation act allowed corporations to take larger deductions for certain investments in 2025, thereby reducing some estimated payments and offsetting the underlying growth in such receipts.

That increase in tariffs would be around $270 billion at a yearlong, which would keep a lid on an otherwise-rising deficit IF it’s not given away on some Trump/GOP “stimulus check” stunt. Also, keep an eye on the declining tax bill from corporations, and the distortions that may cause for the overall economy (both positive and negative).

On the spending side, the "Big Three" of Social Security, Medicare and Medicaid are all up 8-9% from last year, as is interest on the US debt. But many other parts of the federal government lowered their spending in the first four months of this fiscal year.

The Homeland Security stat is interesting, given all of the deployments by ICE in recent months. But the report indicates that's because FEMA is spending much less on reimbursements for natural disasters than they were in the last four months of the Biden Administration. Read into that what you will...

So before tax filings and refunds began en masse , the US budget deficit was in line to go down in Fiscal Year 2026. But let's check back in four more months, after those refunds have been processed, and see if Trump/GOP Tax Scam 2.0 is starting to have this country bleed even more red ink, and if there's an indication as to who is getting the big refunds, and who's stuck paying the bills.