Tuesday, August 3, 2004

Douglas Holtz-Eakin, Director of the Congressional Budget Office, testified on The Tax Code’s Impact on
the Reliability of Revenue Projections before the House Committee on the Budget. Here is the conclusion:

Budget planning is aided by accurate projections of receipts, but the current U.S. tax code has several features that make accurate projections difficult. Of course, ultimately the issue of tax reform is not about what the tax system or tax reform does to analysts’ ability to project revenues. It is about what taxes do to the economy. Nevertheless, some of the current challenges in making projections reflect the underlying costs imposed by the tax code.