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Monday, July 17, 2006
Quick follow up
Score one for suspicion, until a real economist points out where I'm going wrong. Here are the CBO estimates for 2005 and 2006 and the February, 2006 estimates from the White House (OMB). CBO data comes from two reports (here and here). OMB data comes from this report.
| Projection | CBO | OMB |
| 2005 GDP | 12,396 billion | 12,477 billion |
| 2006 GDP | 13,059 billion | 13,142 billion |
| 2005 Gross wages | 5,665 billion | 5,755 billion |
| 2006 Gross wages | 5,979 billion | 6,109 billion |
| 2005 Individual income taxes | 899 billion | 893 billion |
| 2006 Individual income taxes | 986 billion | 966 billion |
| 2005 Corporate profits | 1,331 billion | 1,372 billion |
| 2006 Corporate profits | 1,222 billion | 1,354 billion |
| 2005 Corporate income taxes | 216 billion | 227 billion |
| 2006 Corporate income taxes | 226 billion | 220 billion |
| 2005 Gross receipts | 2,057 billion | 2,053 billion |
| 2006 Gross receipts | 2,212 billion | 2,177 billion |
What's it mean? Well, among other things, the White House predicted that the 2006 economy would be $83 billion larger than the CBO estimate. No problem there -- except that the White House goes on to estimate that tax revenues will be $35 billion lower on a larger economy.
What else does it mean? That the CBO expected to collect 16.5% of gross wages in 2006 as income taxes, but the OMB only expected to collect 15.8%. For 2006, then, the White House expected to collect less in individual income taxes ($20 billion) on higher wages ($130 billion).
