Taxes

CBO periodically issues a compendium of policy options and their effects on the federal budget. This document provides estimates of the budgetary savings from 83 options that would decrease federal spending or increase federal revenues.

In 2017, average household income before accounting for means-tested transfers and federal taxes was $21,300 for the lowest quintile and $309,400 for the highest quintile. After transfers and taxes, those averages were $35,900 and $229,700.

CBO presents its projections of what federal deficits, debt, spending, and revenues would be for the next 30 years if current laws governing taxes and spending generally did not change.

By providing financial support to households, businesses, and state and local governments, federal laws enacted in response to the 2020 coronavirus pandemic will offset part of the deterioration in economic conditions brought about by the pandemic.

The average error for CBO’s budget-year revenue projections is 1.2 percent, indicating the agency has tended to slightly overestimate revenues. For the agency’s sixth-year revenue projections, the average error is greater—5.6 percent.

CBO examines the IRS’s enforcement activities between 2010 and 2018 and analyzes how the decline in those activities reflects the decline in its funding and staff over that period. CBO also estimates how changes to the IRS’s budget could affect federal revenues.

View CBO’s budget infographics to see how much the federal government spent and took in during fiscal year 2019, as well as broader trends in the budget over the past few decades.

CBO has reduced its projections of corporate income tax receipts for the 2020–2029 period by $127 billion (or about 4 percent). That change from the agency’s August 2019 projections arose from several sources.

In CBO’s projections of the outlook under current law, deficits remain large by historical standards, federal debt grows to 98 percent of GDP by 2030, and the economy expands at an average annual rate of 1.7 percent from 2021 to 2030.

CBO examines the tax benefit of having dependents under current law in 2019 and 2026 and analyzes how three policy options that would simplify dependent-related tax provisions would affect that benefit.

This report projects the distributions of household income, means-tested transfers, and federal taxes under current law in 2021 and compares them with the actual distributions in 2016.

CBO examines choices lawmakers would face in establishing a federal tax on the miles traveled by commercial trucks—including choices about the tax base, rate structure, and implementation methods—and illustrates how such a tax might affect the federal budget.

In 2016, average household income before accounting for means-tested transfers and federal taxes was $21,000 for the lowest quintile and $291,000 for the highest quintile. After transfers and taxes, those averages were $35,000 and $214,000.

In this report, CBO projects, on the basis of current law, marginal federal tax rates on labor income from 2018 through 2028. So that current trends can be understood in a historical context, the projections are accompanied by rates from 1962.

CBO periodically issues a volume of options—this year’s installment presents 121—that would decrease federal spending or increase federal revenues. CBO’s website allows users to filter options by topic, date, and other categories.