Something odd and unexpected happened to federal revenue in the fiscal year just ended September 30. Tax receipts increased by 18 percent, or $627 billion, in a single year—far exceeding expectations. It was the biggest one-year increase in tax revenue since 1977.

This happened in a year when the economy only emerged from recession in the third quarter, and employment levels are still depressed relative to pre-pandemic rates. According to CBO, the deficit for FY2021 was $2.8 trillion, or $362 billion less than the deficit for FY2020. The final deficit number was approximately $230 billion below what CBO projected as recently as July.

So what happened?

It would be nice to believe that the economy is in a broad, robust recovery, except it isn’t. It would also be comforting if the revenue windfall were the result of higher worker wages. But payroll tax receipts, precisely tracking wages, were the one major revenue category that actually fell.

What did increase was the income of the very rich. (Even though the tax code is riddled with loopholes, if you make enough money you do have to pay some taxes.)

While ordinary people suffered, corporate profits soared during the pandemic, and corporate income taxes rose by 75 percent over 2020, from $158 billion to $370 billion.

The pandemic was also golden for individual billionaires. The collective fortune of America’s billionaires increased by $1.7 trillion during the pandemic.

The combination of the Fed’s policy of very low interest rates coupled with lax financial regulation was a bonanza for the very rich.

So all of this windfall revenue came in—with no tax reform and with better tax enforcement still on the horizon. If we had a fairer tax code, we could both finance all of Build Back Better and stop obsessing about the deficit.