A delay in tax refunds and an increase in tax collections is helping to narrow the budget deficit, which could give Congress more time before it has to raise the nation's debt limit and borrowing authority.
According to The Wall Street Journal
, the so-called “fiscal cliff” budget deal reached in January allowed the IRS more time to update its computer systems and change forms to comply with the new law.
As a result, the start of refund season for many Americans was delayed by at least two weeks while tax revenues were still going up, creating a better windfall for the government than had been expected.
The IRS said Monday that by April 5, tax refunds had fallen by more than 2 million, or 3.2 percent, compared with last year, the Journal reports. At the same time tax revenues were up due to a variety of reasons, including the increase in payroll taxes and taxes on high-income earners, and higher corporate profits.
As a result, the federal budget deficit is down from $778.98 billion last year at this time to $600.48 billion now.
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