This year’s tax season is critical to the debt ceiling debate. Here’s why.
Taxes,IRS,Federal Spending,Debt Ceiling,Politics
Just how much longer the federal government can keep paying its bills on time and in full depends greatly on this year’s tax collections.
With tax season coming to a close for many filers on Tuesday, the Treasury Department will soon know the amount of tax revenue it has received for 2022 and for the first estimated payment of this year.
That cash is crucial now because the US hit its debt ceiling in January and can’t continue to borrow to meet its obligations unless Congress raises or suspends it. Meanwhile, Treasury is avoiding default, which would happen this summer or early fall, by using a combination of cash on hand and “extraordinary measures,” which should last at least until early June, Treasury Secretary Janet Yellen said in January.
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