Taxes

In CBO's projections, the federal budget deficit in fiscal year 2026 is $1.9 trillion, and federal debt rises to 120 percent of GDP in 2036. Economic growth strengthens in 2026 and moderates in later years.

CBO examines the distribution of income—and of the means-tested transfers and federal taxes that affect it—from 1979 to 2022, placing particular emphasis on the distributions in 2022 and how they differed from those in 2019, 2020, and 2021.

CBO provides details about how health insurance spending is measured in the agency's Distribution of Household Income report series.

CBO announces what to expect in the coming weeks as the agency begins the new calendar year with a series of reports that offers updated insights into the nation's demographic trends, economic outlook, and budgetary conditions.

CBO estimates that as result of P.L. 119-21, resources will decrease for households toward the bottom of the income distribution, whereas resources will increase for households in the middle and toward the top of the income distribution.

CBO's interactive tool allows users to explore how the 2025 reconciliation act (P.L. 119-21) will affect the economic resources available to households grouped on the basis of their income.

CBO estimates that Public Law 119-21 will raise debt-service costs by $718 billion over the 2025–2034 period and increase the cumulative effect on the deficit to $4.1 trillion.

CBO responds to a request for an analysis of the distributional effects of H.R. 1, the One Big Beautiful Bill Act, and updates the preliminary analysis it provided in a letter dated May 20, 2025.

CBO estimates that enacting H.R. 1 and making 16 tax provisions within H.R. 1 permanent would raise debt-service costs by $687 billion over the 2025–2034 period and increase the bill's cumulative deficit effect to $4.5 trillion.

CBO's interactive tool allows users to explore how H.R. 1, the One Big Beautiful Bill Act, as passed by the House of Representatives on May 22, 2025, would affect the economic resources available to households grouped by income.

CBO estimates how the surge in immigration that began in 2021 affected state and local budgets in 2023. State and local tax revenues grew, but the costs of providing services grew more.

CBO provides an overview of federal tax credits that support investment in wind and solar electric power. The agency also explains how it assesses the credits’ budgetary and economic effects and how its baseline reflects JCT’s revenue estimates.

Extending the 10-year budget projections it published on January 17, 2025, CBO projects that federal debt held by the public, boosted by sustained deficits, will grow far beyond any previously recorded level over the next 30 years.

The federal deficit in 2024 was $1.8 trillion, equal to 6.4 percent of gross domestic product.

In CBO’s projections, the federal budget deficit is $1.9 trillion this year, and federal debt rises to 118 percent of GDP in 2035. Economic growth slows and inflation declines over the next two years; both remain moderate after 2026.

CBO examines how its method for analyzing the distribution of household income differs from the Census Bureau’s method for calculating the official poverty measure. The most important differences stem from what each method counts as income.

CBO periodically issues a compendium of policy options and their estimated effects on the federal budget. This report presents 76 options for altering spending or revenues to reduce federal budget deficits over the next decade.

CBO’s Director describes how expiring provisions of the 2017 tax act affect the agency’s baseline projections and reviews some information that has become available since CBO first estimated the effects of the tax act in April 2018.

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.

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.

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.

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

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.

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.