Resistance is building with three days until a government shutdown. Politico reports (paywall) that Speaker Mike Johnson (R-LA) is still getting pushback from the more conservative wing of the caucus. Many still want steep spending cuts, but Johnson’s two-tiered plan temporarily extends current funding levels. A vote on the bill is not yet scheduled.
Treasury: The October 2023 deficit was $67 billion. In its monthly statement on receipts and outlays of the federal government in October 2023 (the first month of the 2024 fiscal year), Treasury estimates that federal receipts were $403 billion and outlays were $470 billion. The total deficit for fiscal year 2023 came in at about $1.7 trillion.
Meanwhile, Moody’s puts the US government’s credit rating on a negative outlook. Higher interest rates “without effective fiscal policy measures to reduce government spending or increase revenues” puts the government at risk of a downgrade, reported Moody’s Investors Service. The credit rating firm also warned political polarization played a role in the decision. A lower debt rating means the US could face higher borrowing costs.
TIGTA: The IRS had a 2023 filing season with few issues. The Treasury Inspector General for Tax Administration report on the 2023 filing season shows the IRS processed 141.1 million tax returns through May 5 and issued $262.9 billion in refunds. The IRS provided an 82.8 percent level of service when answering calls with automation or telephone assisters. TIGTA made no recommendations in its report.
IRS announced annual inflation adjustments for tax year 2024. Over 60 tax provisions will be adjusted to reflect the growth in consumer prices. Revenue Procedure 2023-34 provides detailed information about these annual adjustments. Compared to tax year 2023, the standard deduction for married couples filing jointly will climb by $1,500 to $29,200. For single taxpayers and married individuals filing separately, the standard deduction will climb by $750 to $14,600. For tax year 2024, the top tax rate of 37 percent will apply to income for single taxpayers greater than $609,350 ($731,200 for married couples filing jointly).
Michigan pot tax revenue exceeds alcohol tax revenue and then some. In the most recent fiscal year, sales of legal marijuana generated $266.2 million in state tax revenue, more than what Michigan collected from taxes on beer, wine, and liquor combined. Taxes from sales of adult-use cannabis climbed 49.1 percent in the fiscal year ending Oct. 31, up from $178.6 million collected the year before.
Illinois lawmakers let private school tax credit program expire. The state legislature adjourned their fall veto session last week and did not renew the Invest in Kids program, which will now sunset on Dec. 31. The program allowed donors to six state-approved private schools to claim a 75 percent tax credit for their scholarship donations. The program, in effect since 2018, has been capped annually at $75 million. The state has not determined whether the scholarships students received performed any better academically than their public school peers.
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