Goldman with the update.
- Tax receipts for the April filing season continue to run far below last year’s levels. With “Tax Day” receipts now on the books, non-withheld receipts month-to-date are down 29%, a touch below the 28% decline we have been assuming in our projection that the debt limit deadline will hit in late July (we recently moved this up from early August). Adjusted for calendar issues and assuming that a slightly greater share of taxpayers file electronically this year (electronic payments show up more quickly, raising the hurdle for the yoy comparison), month-to-date receipts are down 31% from last year.
- If April tax receipts are down by 35% or more, we think the Treasury will be more likely to announce an early June debt limit deadline. If tax receipts are down by less than 30%, we think a late July deadline is still more likely. That said, other Treasury cash flows will influence the deadline that Treasury ultimately projects, as will risk management considerations.
- Tax data over the next few days will narrow the range of outcomes. Collections for the day after “Tax Day” (reported April 20) are usually nearly as large as the day of the deadline. By next Tuesday (April 25), the Treasury will probably have collected at least 75% of the non-withheld tax payments it will receive in April and May.
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