WASHINGTON, July 8 — An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.
On Tuesday, White House officials are expected to announce that the tax receipts will be about $250 billion above last year's levels and that the deficit will be about $100 billion less than what they projected six months ago. The rising tide in tax payments has been building for months, but the increased scale is surprising even seasoned budget analysts and making it easier for both the administration and Congress to finesse the big run-up in spending over the past year.
For those somnambulant liberals, and others who have not been paying attention, go ahead and read the whole thing. The rest of us have known about this for months. Krugman's column will be out in September.
Rob Adds:
Notice that this "steep rise" in tax revenue is coming from corporations and the wealthy.
If Bush's tax cuts really were "for the rich," then why on earth is this climb in tax revenues being fueled by "the rich?" Could it be that Bush and Republicans have had it right on tax cuts and tax reform all along?
I suspect that's true, but don't expect any liberals you know to admit to any such heresy.