Taxes

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 regularly analyzes the distribution of income in the United States and how it has changed over time. This report presents the distributions of household income, means-tested transfers, and federal taxes between 1979 and 2019.

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.

CBO examined how the benefits from major tax expenditures in the individual income tax and payroll tax systems were distributed among households in different income groups in 2019.

CBO describes estate and gift taxes, the people who pay them, the types of assets that make up taxable estates, and the model the agency uses to project estate and gift tax revenues in its baseline.

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.

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.