Corporate Tax Receipts Down $95 Billion as Bonus Depreciation Bites

Federal cash collections from corporation income taxes are running nearly $95 billion below a year ago through August of fiscal 2026, according to the U.S. Treasury's Monthly Treasury Statement — a drop of about one-quarter, not the nearly $200 billion year-over-year cash shortfall that circulated in some draft framing.

The August 2026 Monthly Treasury Statement (Table 3) puts corporation income taxes at $294.857 billion for the fiscal year to date (October through August), compared with $389.614 billion in the same span of fiscal 2025 — a decline of $94.757 billion, or 24.3%. August alone was a seasonally thin $1.948 billion. The Congressional Budget Office's August Monthly Budget Review, as summarized by TaxProf Blog on Sept. 19 and congruent secondary accounts, rounds the same eleven-month span to about $294 billion versus $390 billion, a drop of roughly $96 billion, or 25%.

That cash decline is not unexplained policy silence. The One Big Beautiful Bill Act, signed July 4, 2025, permanently restored 100% bonus depreciation under IRC §168(k) for qualifying property placed in service after Jan. 19, 2025, among other business provisions. The federal statutory corporate rate remains 21%. CBO, as quoted in the TaxProf summary of the September figures, says the 2025 reconciliation act "allows corporations to take larger deductions for certain investments, thereby reducing some payments and offsetting the increases in those receipts that otherwise would have been expected, given the rise in corporate income." The American Action Forum's Sept. 14 read of the August MTS likewise attributes a $95 billion (24%) corporate-receipt decline to those OBBBA business tax changes.

Three different "rates" are easy to confuse. The statutory rate is still 21%. Cash taxes remitted show up in Treasury's corporation income tax line — the series used above. Book or accrual effective rates are a different concept. Bureau of Economic Analysis figures on FRED show taxes on corporate income (accrual, seasonally adjusted annual rate) at $905.944 billion in the second quarter of 2026, up from $670.256 billion a year earlier, while corporate profits before tax without IVA and CCAdj rose to $5,208.360 billion from $4,026.153 billion. A rough implied accrual tax-to-profits ratio moves from about 16.6% to about 17.4% — slightly higher, not lower. A claim that the aggregate cash effective corporate rate fell more than five percentage points year-over-year was not located in a named Treasury, BEA, CBO, IRS SOI or Fed Flow of Funds primary for this cycle and is not used here.

A separate ITEP tally from Aug. 14, 2026 — about $204 billion in federal tax breaks disclosed by publicly traded U.S. companies for 2025 — is a stock of disclosed breaks for that year, not a year-over-year drop in Treasury cash receipts. Equating that figure with the MTS cash series would mix concepts.

The Federal Reserve is tightening into this fiscal backdrop. The Federal Open Market Committee on Sept. 16, 2026, raised the federal funds target range by one-quarter percentage point to 3¾ to 4 percent, citing solid activity, elevated inflation and a labor market that has kept pace.

Oil prices remain elevated after a volatile mid-September week tied to Middle East supply risk. EnergyNow, citing TradingView settles for Friday, Sept. 18, put West Texas Intermediate at $100.30 a barrel and Brent at $103.87 — off earlier-week highs near $106 WTI / $109 Brent but still above $100.

Labor-market data from the Department of Labor point the other way from a cracking jobs market. Seasonally adjusted initial unemployment insurance claims for the week ending Sept. 12, 2026, were 196,000, down 10,000 from the prior week, according to the DOL ETA weekly claims release. The four-week moving average was 203,250. A year earlier, initial claims for the comparable week were 233,000. Market commentary that claims lead payrolls by about two months is analyst convention, not a finding stated in the DOL release.

Corporation income taxes are one slice of federal receipts that help fund national programs, including transit and infrastructure grants that reach Long Island. The MTA on July 14, 2026, announced a $7,461,000 federal grant for planning and preliminary design to eliminate three Long Island Rail Road Ronkonkoma Branch grade crossings in Brentwood, Wyandanch and Central Islip. No source reviewed for this package ties the year-to-date corporate tax receipt decline to cuts or freezes in that grant, other LIRR subsidies or Suffolk County infrastructure awards. Deficit debates that treat the statutory 21% rate as if it equaled cash paid blur the cash-versus-statutory distinction the MTS numbers make plain.

Full-year fiscal 2025 corporation income tax receipts were $452.089 billion, down $77.778 billion from $529.867 billion in fiscal 2024, per earlier MTS finals. The August 2026 statement's budget estimate for full-year fiscal 2026 corporation income taxes is $398.640 billion; September's statement was not yet out as of Sept. 20.