WASHINGTON – US Treasury deficit rose to $ 779 billion in fiscal 2018, the Treasury said Monday after Trump's tax cuts plummeted.
The deficit increased nearly 17 percent year-over-year from $ 666 billion in 2017. The Trump government and external analysts predict that it will reach a peak of $ 1 trillion a year before the next presidential election. The deficit for the financial year 2018, which ended on 30 September, was the largest since 2012, when the economy and federal revenues were still recovering from the depths of the recession.
Government officials attributed the increase in the deficit to higher government spending. including the military and domestic spending that President Trump approved this year, rather than the $ 1
"President Trump attached great importance to a significant investment in America's military, after years of military spending reduction undermined our preparedness and national security." Finance Minister Steven Mnuchin said in a statement. "In the future, the President's economic policy, which has stimulated strong economic growth, coupled with proposals to reduce wasteful spending, will lead America to a sustainable financial path."
The figures published by Mr. Mnuchin's department, however, suggest that declining revenue suggests much more of a rising deficit than higher spending. Although federal spending rose for the year, as the economy grew faster than the previous year's spending, as a share of the economy, they fell from 20.7 percent to 20.3 percent.
Federal revenue increased by 0.2 percent from the 2017 fiscal year. This was a slowdown compared to previous years. Sales increased by 1.5 percent between the 2016 and 2017 financial years. Between 2015 and 2016, when economic growth was much slower than last year, they rose by 0.5 percent. Between 2014 and 2015, they rose by 7.5 percent.
In the financial year 2018, the share of the economy declined from 17.2 percent in the previous year to 16.5 percent. Revenues are now almost one percentage point lower than the average for the last 40 years, the Ministry of Finance said in its press release.
Income tax receipts increased slightly in the past fiscal year, according to data from the Ministry of Finance, but in September were lower than a year ago. The big drop in sales came on the business side. Corporate tax revenues fell one-third from the same period last year, a direct result of the tax laws signed last year, which reduced the company's top rate from 35 percent to 21 percent.
FY 2018 Fiscal year revenue from corporate taxes was nearly $ 205 billion. This figure represents a decrease of $ 297 billion in fiscal year 2017.
The figures for 2018 do not reflect the full year of impact of the Trump tax cuts, which included cuts for individuals and pass-through companies. Most provisions of the new law came into force in January.
The numbers suggest that the metals imported by Mr. Trump from imported metals from several countries and imported $ 250 billion from China have not generated enough revenue to pay off the public debt, as Mr. Trump has promised, though they produce more revenue than in previous years.
For fiscal year 2018, the category that trumps tariffs, "Customs," brought in about $ 41.3 billion in federal revenue. That was an increase of about $ 34.6 billion in 2017, an increase of nearly 20 percent.
Many Republicans, including Mr Mnuchin, said in the tax policy debate last year that the proposed cuts would be amortized by faster economic growth and higher interest rates, in line with higher federal revenues. External analysts disagreed. The Joint Committee on Taxation, the Congress's official tax adviser, predicted that the bill would cut revenue by $ 1 trillion, even if it was about additional growth.