IRS Collects Record Revenue for FY 2023

The Department of the Treasury and the Internal Revenue Service issued its much awaited collected tax revenues for Fiscal Year (FY) 2023 two weeks ago.  In a surprising turn of events for FY 2023, IRS collected over $6 trillion in gross taxes, which is a 25% increase from last year’s revenue, processed more than 300 million tax returns and other forms, and yet issued less than $400 billion (a 25% decrease) in tax refunds. Experts are puzzled by this windfall to the federal coffers and why the tax revenue projections released in December 2023 were so off base, since they predicted the same general tax revenue as in FY 2022.  Many explanations have been put forth so far by economists, tax experts and tax policy wonks, but none of the proffered reasons wholly explain this turn of events.

One interesting explanation has been given by Dr. Alexander McClintock, a professor of economics and game theory at the University of Pennsylvania, whose research focuses on how social media influences economic events.  He believes that the surprisingly high tax revenue is a result of a social media campaign that first appeared on X (formerly known as Twitter) in late 2023.

“As you may recall, Ms. Saira Rao, the founder of Race2Dinner, tweeted her concern about Jewish doctors this past December,” McClintock said, “If I recall correctly she said ‘Realizing how many American doctors and nurses are Zionists and genuinely terrified for Palestinian, Arab, Muslim, South Asian and Black patients — even more than usual’.”  He hypothesized that many American taxpayers took Ms. Rao’s message to heart and sought to “divest their services from Jewish accountants as well as doctors.”  This loss of professional experience, in McClintock’s opinion, led to record tax revenue and smaller taxpayer refunds.  He argues that the raw underlying data supports his conclusion.

McClintock was unwilling to hazard a guess as to the next tax season as most consumers are usually responsive to financial outcomes, but did note that he has been encountering more traffic on his work commute, which he ascribes to drivers “abstaining from using Waze.”  One benefit to McClintock, who is a big fan of Goldie’s tehina shakes, is that “the lines are much shorter now.”