Rising debt service and a shifting tax mix reshape the US fiscal picture
Tariffs are now bringing in more money for Washington than corporate taxes — an unusual shift that comes as the US still runs a deficit above US$1tn.
The US budget deficit reached US$1.004tn in the first five months of the 2026 fiscal year, yet it was about 12 percent lower than the same period a year earlier because revenues rose faster than spending, according to CNBC.
Reuters reported that fiscal year‑to‑date receipts rose 11 percent to US$2.098tn, while outlays increased 2 percent to US$3.012tn.
In February alone, the deficit came in at US$308bn, nearly flat from a year earlier, as per both outlets.
February receipts totalled US$313bn, up US$17bn or 6 percent, while outlays rose by the same amount to US$621bn, a 3 percent increase from February 2025.
According to CNBC, customs duties totalled US$151bn through the first five months of the fiscal year, up about US$113bn, or 294 percent, from a year earlier.
For the fiscal year to date, tariff revenues have actually exceeded corporate tax receipts, calling this an unusual shift.
Reuters said the report showed a slight cooling in net customs duties in February to US$26.6bn, compared with US$27.7bn in January and “over US$30bn” in the final months of last year.
CNBC reported that the recent US Supreme Court decision striking down many of US President Donald Trump’s tariffs has not yet appeared in the data.
Economists cited by CNBC said this could reflect duties collected earlier still being processed, a possible surge in imports ahead of the ruling, and uncertainty over whether and to what extent the US will need to issue refunds on tariffs already collected.
Reuters said the Supreme Court struck down duties imposed under the International Emergency Economic Powers Act as illegal and noted that Customs and Border Protection stopped assessing those tariffs on imports starting on February 24.
CBP is preparing a streamlined refund process ordered by the Court of International Trade, and that the Trump administration has imposed a new, temporary 10 percent duty for 150 days.
CNBC added that Trump has imposed additional tariffs since the decision that could continue to boost customs revenue.
Corporate tax revenue declined sharply, falling US$27bn, or 17 percent, from a year earlier.
Reuters reported that February receipt growth was driven in part by a US$15bn increase in individual withheld income taxes, partly reflecting the payment of 2025 year‑end bonuses.
This was offset by a US$7bn increase in corporate tax refunds and a US$6bn increase in individual tax refunds driven by last year’s Republican‑passed tax cut legislation.
CNBC reported that elevated interest rates continued to weigh on the federal fiscal picture.
Net interest payments on the nearly US$39tn national debt totalled US$79bn in February, more than any category except Social Security, income security — including unemployment insurance, housing assistance and food aid — and health care.
Reuters, looking at February’s outlays, said interest on the public debt grew US$8bn or 9 percent to US$93bn, while military outlays rose US$6bn or 9 percent to US$67bn.
