Тузувчи : Файзуллаева Н

Step 6. We next adjust the CBO-like forecast to be consistent with CBO’s baseline projections of NIPA Federal tax receipts. NIPA Federal tax receipts include taxes from the rest of the world, taxes on production and imports, taxes on personal income, and taxes on corporate income.48 CBO publishes projec­tions for all four. Setting Federal taxes from the rest of the world and Federal taxes on production and imports is relatively straightforward. We replace GI’s projections with published projections from CBO’s current-law baseline.

Setting Federal taxes on personal and corporate incomes is more involved. This is because doing so requires that we separately target both average ef­ fective Federal income tax rates and the GI model’s Federal personal and corporate income tax bases. For example, the GI model defines the Federal personal income tax base as a function of both NIPA taxable personal income and individual capital gains. CBO publishes projections of individual capital gains realizations.49 We must therefore adjust our target for the Federal personal income tax base to reflect CBO’s projections of capital gains.

The GI model also includes an approximation of the corporate income tax base. The Global Insight model defines the Federal corporate income tax base as before-tax corporate (book) profits minus rest-of-world corporate prof­its and the profits of the Federal Reserve.50 CBO publishes its projections of corporate (book) profits. However, targeting corporate profits is complicated because they are a residual of gross national product (GNP) in the GI model.51 As such, they cannot simply be replaced in our CBO-like forecast with CBO’s published projections.

Rather, we iteratively modify the statistical discrepancy in the CBO-like forecast to target corporate profits indirectly. The statistical discrepancy in the final CBO-like forecast generally exceeds the statistical discrepancy in the control forecast. This is in part because we adjust corporate profits in the CBO-like forecast to fall roughly in line with the jump in contributions to de­fined-benefit pension plans forecast by CBO. Thus, the statistical discrepancy averages just under 0.4 percent of GDP between 2007 and 2016 in the control forecast. It averages just over 0.7 percent of GDP over the same period in the final CBO-like forecast.

Before completing step 6, we calculate average effective Federal tax rates on personal and corporate incomes. These average effective rates reconcile CBO’s projections of Federal personal and corporate income tax revenues with approximations of the Federal personal and corporate income tax bases included in the final CBO-like baseline forecast.52 We impose these average effective tax rates in the CBO-like forecast.