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Tax bonanza helps cut US deficit Tax bonanza helps cut US deficit
(10 minutes later)
Bumper tax income has helped the US government cut its 2006 federal budget deficit to a four-year low of $247.7bn (£133bn), the US Treasury said. Bumper tax income has helped the US government cut its 2006 federal budget deficit to a four-year low of $247.7bn (£133bn), the US Treasury has said.
The shortfall for the budget year to 30 September 2006 was 22% lower than the $318.7bn recorded in 2005.The shortfall for the budget year to 30 September 2006 was 22% lower than the $318.7bn recorded in 2005.
Spending and tax revenues hit all-time highs, but the deficit fell because spending rose 7% and tax income by 12%. Spending and tax revenues hit all-time highs, but the deficit fell as spending rose 7% and tax income climbed 12%.
The 2006 figure is far below the $423bn gap forecast last February and the revised $295.8bn estimate from July. President George W Bush said: "Our economy is creating jobs and reducing the deficit."
He added: "It is making our nation a more prosperous nation for all our citizens."
The 2006 figure is far below the $423bn gap forecast in February and the revised $295.8bn estimate from July.
The US has recorded consistently high deficits in recent years, leading critics of the Bush administration to accuse it of fiscal indiscipline.The US has recorded consistently high deficits in recent years, leading critics of the Bush administration to accuse it of fiscal indiscipline.
In return it has promised to halve 2004's record $413bn imbalance, and claims that the tax cuts introduced in recent years have helped stimulate the economy, thus raising tax receipts. In return it has promised to halve 2004's record $413bn imbalance, and claims that the tax cuts introduced in recent years have helped to stimulate the economy, thus raising tax receipts.
After the deficit news, Mr Bush said: "Good tax policy has a lot to do with keeping the economy strong. I would urge Congress to make tax cuts permanent."