Tax Receipts Are Leaning Toward The "Worst-Case" Debt Ceiling Scenario

Earlier this week we wrote "Why This Week's Tax Data Could Lead To A Much Earlier Debt Ceiling Crisis", in which we explained that as a result of the rapid depletion of the Treasury's cash balance (daily updated in the form of the Treasury General Account) the receipts collected by the Treasury after the April 18 tax deadline would be extremely important in determining whether the US debt ceiling crisis would take place some time in September - as most currently expect - or whether the X-date (beyond which the US Treasury will need to prioritze payments in order to stay current on its debt and interest payments and avoid a default) would be pulled up as soon as June.

Well, we now have the last few days of the filing season in the books, and there hasn't been a notable change for the better. In fact, tax receipts for the April filing season continue to run far below last year’s levels.

As Goldman's chief political economist Alec Phillips writes today, with “Tax Day” receipts now in the books, non-withheld receipts month-to-date are down 29%, which is below the 28% decline Goldman had been assuming in its projection that the debt limit deadline will hit in late July (which in turn was recently moved up from early August).