Feb. 18, 2011
Financing the Budget: Revenues and Deficits (in 2012 Dollars)
- The FY12 deficit is projected to be $1.06 trillion, a decrease of $440 billion from FY11. 96% of the deficit decrease will come from increased revenues due to the continued improvement in the economy.
- Historically, deficits increase during recessions when need-based programs, which are included in mandatory spending, expand, and revenues decline due to a rise in unemployment and a drop in corporate profits.
- Compared to FY08, the last year before the recession, revenues are expected to be $20 billion less.
- These projections are based on an assumption that the national unemployment rate will decrease to 8.8% in FY2012
- The FY12 budget projects total revenues of $2.6 trillion, which is a $423 billion, or 19.2%, increase from FY11
- The following are the projected sources for the $423 billion increase: individual income taxes will increase by $171 billion or 18%; corporate income taxes will increase by $128 billion or 64%; payroll taxes will increase by $107 billion or 13% and excise taxes will increase by $27 billion or 37%.
Projected FY2012 Revenues By Source
Notes: Numbers presented here are in 2012 dollars.
1. All deficit numbers are based on the difference between budget authority and revenues, not outlays and revenues as estimates elsewhere are based.