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Tax revenue collected by the IRS set to plummet, report says

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A view of the Internal Revenue Service (IRS) building in Washington, D.C., U.S., February 16, 2025. 

Annabelle Gordon | Reuters

Officials at the Internal Revenue Service and Treasury Department are anticipating tax revenue to drop more than 10% by April 15 compared with last year, the Washington Post reported Saturday, citing three people with knowledge of the situation.

The loss of tax receipts is expected as more individuals and businesses don’t file taxes or attempt to avoid paying balances owed to the IRS. The amount of lost federal revenue could top $500 billion, the paper said.

Officials said the prediction is directly linked to shifting taxpayer behavior and President Donald Trump‘s cuts at the IRS, the Washington Post said.

Thousands are expected to lose their jobs at the agency as part of Elon Musk‘s Department of Government Efficiency spending cuts. Experts have warned that the cuts during tax season could materially impact filers.

The IRS has also noted increased chatter online from people saying they won’t pay taxes this year or will make aggressive claims they aren’t eligible for in a gamble that they won’t be audited, the Washington Post reported.

The Treasury Department told the paper the story was “sensational and baseless” and said the anonymous sources “should be dismissed out of hand.”

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Economics

German inflation May 2025

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19 May 2025, Berlin: Apricots are sold at a greengrocer for 7.98 euros per kilogram. Grapes and papaya are also on offer.

Photo by Jens Kalaene/picture alliance via Getty Images

Germany’s annual inflation hit 2.1% in May approaching the European Central Bank’s 2% target but coming in slightly hotter than analyst estimates, preliminary data from statistics office Destatis showed Friday.

The print compares with a 2.2% reading in April and with a Reuters projection of 2%.

The print is harmonized across the euro zone for comparability.

So-called core inflation, which strips out more volatile food and energy prices, dipped slightly from April’s 2.8% to 2.9% in May. The closely watched services print meanwhile eased sharply, coming in at 3.4% compared to 3.9% in the previous month.

Energy prices fell markedly for the second month in a row, tumbling by 4.6% in May.

Germany’s consumer price index has been closing in on the European Central Bank’s 2% target over recent months, in a positive signal amid ongoing uncertainty about the economic outlook for Europe’s largest economy.

Domestic and global issues have mired expectations for Germany’s financial future.

One the one hand, U.S. President Donald Trump’s tariffs could damage economic growth, given Germany’s status as an export-reliant country, though the potential impact of such duties on inflation remains unclear. But frequent policy shifts and developments have been muddying the picture.

On the other hand, Germany’s newly minted government is starting to get to work and has made the economy a top priority. Questions linger about when and to what extent the new Berlin administration’s policy plans might be realized.

The ECB is set to make its next interest rate decision on June 5, with traders last pricing in an over 96% chance of a quarter point interest rate reduction, according to LSEG data. Back in April, the central bank had cut its deposit facility rate by 25 basis points to 2.25%.

This is a breaking news story, please check back for updates.

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Economics

Trump advisor Hassett confident tariffs will stay despite judges’ ruling

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National Economic Council Director Kevin Hassett speaks to reporters at the White House in Washington, D.C., U.S., April 14, 2025. 

Kevin Lamarque | Reuters

A top economic advisor to President Donald Trump expressed confidence Thursday that court rulings throwing out aggressive tariffs will be overturned on appeal.

Kevin Hassett, director of the National Economic Council, said in an interview that he fully believes the administration’s efforts to use tariffs to ensure fair trade are perfectly legal and will resume soon.

“We’re right that America has been mishandled by other governments,” Hassett said during a Fox Business interview. “This trade negotiation season has been really, really effective for the American people.”

The comments follow a ruling from judges on the Court of International Trade who said Trump exceeded his authority on tariffs, which are aimed both at combating barriers against American goods abroad and stemming the flow of fentanyl across the U.S. border.

While the Centers for Disease Control and Prevention has said that fentanyl is the primary driver in domestic overdose deaths, the judges ruled that related tariffs “fail because they do not deal with the threats set forth in those orders.”

Hassett bristled at the ruling and said the administration will continue its anti-fentanyl efforts.

“These activist judges are trying to slow down something right in the middle of really important negotiations,” he said. “The idea that the fentanyl crisis in America is not an emergency is so appalling to me that I am sure that when we appeal, this decision will be overturned.”

The administration has multiple options to get around the judges’ ruling, including other sections of trade laws it can utilize. However, Hassett said that’s not the plan at the moment.

“The fact is that there are measures that we can take with different numbers that we can start right now. There are different approaches that would take a couple of months to put these in place,” he said. “We’re not planning to pursue those right now, because we’re very very confident that this ruling is incorrect.”

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Economics

America’s immigration detention centres are at capacity

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IN APRIL Todd Lyons, the acting director of Immigration and Customs Enforcement (ICE), lamented that it takes too long to deport illegal immigrants. At the Border Security Expo in Phoenix he told a crowd of startup bosses vying for government contracts that a better deportation system would function more like Amazon, the tech giant whose delivery drivers zigzag the country at record speed. “Like Prime, but with human beings,” he said.

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