Тузувчи : Файзуллаева Н

Calibrating the Microsimulation Model. The primary challenge we face in calibrating the microsimulation model to CBO’s baseline projections is a bit different. The inputs into the calibration procedure for the microsimulation model already reflect current law. For example, we use a number of economic variables from the CBO-like forecast. We also use many of the Federal revenue projections published in the revenue outlook chapter of CBO’s The Budget and Economic Outlook.

However, economic inputs from the CBO-like forecast provide only a starting point. This is because they are expressed as NIPA values and not as amounts reported on tax returns. The microsimulation model simulates the effects of tax law changes on a representative sample of over 100,000 Federal individual income tax returns based on the characteristics of the individuals and families associated with those returns. A crosswalk is therefore needed to reconcile the definitional and timing differences among NIPA personal income, the amount of income reported on income tax returns, and supplementary information obtained from the Current Population Survey (CPS). Non-NIPA components of individual income such as capital gains, pensions, annuities, and individual retirement accounts must also be added. Data for tax return filers and nonfilers must then be extrapolated (“aged”) over the 10-year budget period.

As a result, a key part of our calibration procedure involves deriving de­tailed targets for the amount of tax-related income, the distribution of tax-related income, and the demographic characteristics of the U.S. population. These targets are then used to adjust data on records in the microsimulation model so that those records are in aggregate consistent with CBO’s baseline economic and budgetary projections. Such information is not typically published by CBO and cannot generally be obtained directly from CBO or other sources. The exceptions are demographic projections, which are available from the Census Bureau, and projections of total individual capital gain realizations, which CBO publishes every January in The Budget and Economic Outlook.37