The consensus among economists is that real growth in the second quarter, to be released in late July, will come in at less than 2%. But economist Joseph G. Carson of Dean Witter Reynolds Inc. thinks it could be 2.6% or more.
Carson bases his prediction on federal tax receipts. In June, corporate income-tax payments were 16.8% higher than a year ago. Part of that is due to a law change that makes companies pay more in the quarter they earn the income. But Carson figures corporate payments are up at least 12% from last year. And federal withheld individual income and payroll tax receipts (excluding estimated tax payments) are up 5% to 6% over 1992, even though the government estimates that wage and salary income is running only 4.5% ahead of last year.
"Companies and individuals don't pay taxes on phantom income," argues Carson. "Tax revenues are pointing to a stronger economy than the consensus expects and one that clearly gained strength at the end of the quarter."