US Treasury Corporate Tax Revenue Falls 16% in FY2026 as Bond Yields Resume Rise

The U.S. Treasury collected $382 billion in corporate taxes in fiscal year 2026, a 16% decline from the prior year, as deductions expanded under the One Big Beautiful Bill allowed companies to immediately write off certain investments. The shortfall contributed to a federal budget deficit of nearly $2 trillion for the fiscal year, up 12% from FY2025, with interest payments on the national debt exceeding $1.3 trillion and now surpassing the entire defense budget.

The financing pressures those figures imply are stoking fresh anxiety on Wall Street over the Treasury's plans to fund the widening gap. Yields on 10-year and 30-year Treasuries resumed their climb on Monday after falling sharply the prior week, with the 10-year reaching 5.34% and the 30-year touching 5.7%, multi-decade highs, as the bond market weighed the scale of government borrowing ahead. A rebound in U.S. technology shares simultaneously sapped haven demand for government debt, adding further selling pressure to Treasuries.

Market watchers are closely tracking Treasury Secretary Scott Bessent's next moves after his August decision to upsize purchases of older securities caught traders off guard. With the national debt at record levels and debt-servicing costs now the largest single line item ahead of defense spending, investors are pricing in a sustained period of elevated supply that could keep long-end yields under pressure.