What Happens When You Raise Taxes?

This.

The Congressional Budget Office said the unanticipated $203 billion cut to the current-year shortfall -- a 24 percent drop from just three months ago -- comes from higher-than-expected individual and corporate tax payments and $95 billion in expected dividend payments from mortgage-finance companies Fannie Mae and Freddie Mac.   

The $845 billion in red ink in February would have put the deficit at 5.4 percent of economic output. The new projection would put the deficit at 4 percent of gross domestic production. The deficit was 7 percent of the budget in 2012 and 10.1 percent in 2009.

I'm confused. I thought that raising taxes and bailing out Fannie and Freddie would make things worse.