This document provides details on how the Congressional Budget Office projects corporate income tax revenues. It focuses on CBO’s method for mapping economic projections of corporate profits (that is, projections of corporate profits included in CBO’s overall economic forecast) to projections of the corporate income tax base (that is, income subject to the corporate tax).
CBO’s projections of corporate income tax revenues are an important component of the agency’s budget projections. CBO generally prepares 10-year baseline budget projections each winter for its annual Budget and Economic Outlook and updates those projections the following summer.
This document is divided into three sections:
A high-level overview of CBO’s approach to projecting corporate tax revenues and the data the agency uses for those projections,
A detailed discussion of the methods CBO uses to relate economic projections of corporate profits to those of the corporate income tax base, and
Information on how CBO addresses the timing and availability of data for its projections.
It concludes with a discussion of areas for future research.