Taxes

New policies implemented by the federal government affected transfers and taxes in 2021. The policies largely benefited lower- and middle-income households. But income inequality still increased, mainly because of realized capital gains.

CBO regularly analyzes the distribution of income in the United States and how it has changed over time. This slide deck presents the distributions of household income, means-tested transfers, and federal taxes between 1979 and 2021.

In CBO’s projections, the deficit totals nearly $2 trillion this year. Large deficits push federal debt held by the public to 122 percent of GDP in 2034. Economic growth slows to 2.0 percent in 2024 and 1.8 percent in 2026 and later years.

CBO published initial results of the distribution of income by race and ethnicity in "AEA Papers and Proceedings."

CBO provides information about how its most recent budget projections would change under different assumptions about future legislated policies.

The federal budget deficit increases significantly in relation to gross domestic product over the next 30 years, in CBO’s projections, pushing federal debt held by the public far beyond any previously recorded level.

The federal deficit in 2023 was $1.7 trillion, equal to 6.3 percent of gross domestic product.

CBO describes how funding for the IRS affects CBO’s revenue projections and how CBO estimates the revenue effects of rescissions of such funding. CBO also estimates the budgetary effects of rescinding varying amounts of the IRS’s funding.

In CBO’s projections, federal budget deficits total $20 trillion over the 2025–2034 period and federal debt held by the public reaches 116 percent of GDP. Economic growth slows to 1.5 percent in 2024 and then continues at a moderate pace.

CBO will release "The Budget and Economic Outlook: 2024 to 2034" at 2 p.m. EST on February 7.

In 2020, the coronavirus pandemic and the ensuing federal response had significant effects on the distribution of household income. Income inequality before transfers and taxes increased, but inequality after transfers and taxes decreased.

CBO regularly analyzes the distribution of income in the United States and how it has changed over time. This slide deck presents the distributions of household income, means-tested transfers, and federal taxes between 1979 and 2020.

The U.S. faces a challenging fiscal outlook in the coming years, according to CBO's projections. Measured as a percentage of GDP, large and sustained deficits lead to high and rising federal debt that exceeds any previously recorded level.

CBO provides information about how its most recent budget projections would change under different assumptions about future legislated policies.

CBO’s updated projections show a federal budget deficit of $1.5 trillion for 2023. That estimate is subject to considerable uncertainty, though, in part because of a recent shortfall in tax revenues.

Over recent decades, corporate economic profits have grown faster than the amounts that corporations pay in federal taxes. CBO examined the factors that explain why corporate tax payments have not grown with corporate economic profits.

The Congressional Budget Act of 1974 requires CBO to prepare estimates of the cost of legislation at certain points in the legislative process. This document provides answers to questions about how CBO prepares those cost estimates.

The Congressional Budget Act of 1974 requires CBO to produce an annual report on federal spending, revenues, and deficits or surpluses. This document provides answers to questions about how CBO prepares those baseline budget projections.

View CBO’s budget infographics to see how much the federal government spent and took in during fiscal year 2022, as well as broader trends in the budget over the past few decades.

In CBO’s projections, the federal deficit totals $1.4 trillion in 2023 and averages $2.0 trillion per year from 2024 to 2033. Real GDP growth comes to a halt in 2023 and then rebounds, averaging 2.4 percent from 2024 to 2027.

CBO issues a volume describing 17 policy options that would each reduce the federal budget deficit by more than $300 billion over the next 10 years or, in the case of Social Security options, have a comparably large effect in later decades.

CBO issues a volume that contains short descriptions of 59 policy options that would each reduce the federal budget deficit by less than $300 billion over the next 10 years.

CBO explains why it uses an income and payroll tax offset when estimating the budgetary effects of changes in indirect taxes, how the rate of the offset is set, and how it is applied in cost estimates and in baseline projections of revenues.