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Tax Numbers Don't Alter Analyst Core Scenarios, But Risks Evident (2/2)

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  • Goldman Sachs sees month-to-date receipts down 31% from last year when adjusted for calendar and other issues - and they believe 35% is the threshold for Treasury to announce an early June x-data. A drop of less than 30% would keep late July as the base case. "Non-withheld tax receipts so far still lean slightly in favor of a late July deadline, but it would take only a few days of slightly weaker tax collections to tip the deadline to early June."
  • Wrightson ICAP says the April 18 revenues came in below their expectations, but due to other factors, their overall cash flow projections for the month have only fallen by $10B since the beginning of the week. They now see around a 20% probability of an x-date being hit in June, though late July/early August is still the most likely outcome. "The debt ceiling timeline remains ambiguous ... we still think the Treasury will probably have enough fiscal resources to get past its seasonal low point in the second week of June, but the risk of a June x-date edged up a little yesterday. "
  • NatWest writes that comparing 2023's tax season to 2019's rather than to 2022's is more apt given unusually large collections in the latter; in this regard, collections are 12% higher this year than in 2019. "We don’t think these numbers are underwhelming and doesn’t lead us to change our forecast for an x-date to early June yet (still think late July is when Treasury would run out of cash).
  • JPMorgan analysts write that while the key electronically-filed individual income taxes are totalling well below 2022 levels, it's "prudent to wait a couple more days in order to get a cleaner read on individual income taxes". But "regardless, at this point, it appears that risks around our x-date estimate skew earlier."
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