How CBO analyzed the macroeconomic effects of the President's budget

Original publisher: [Washington, D.C.] : Congress of the U.S., Congressional Budget Office, [2003] OCLC Number: (OCoLC)71436936 Subject: Budget -- United States. Excerpt: ... 6 HOW CBO ANALYZED THE MACROECONOMIC EFFECTS OF THE PRESIDENT'S BUDGET Table 3. The Cumulative Budgetary Impact of the President's Proposals Including Macroeconomic Feedbacks ( Cumulative change from CBO's baseline, in billions of dollars ) 2004-2008 2009-2013 Supply-Side Model Without Forward-Looking Behavior Textbook Growth Model-847-2,126 Supply-Side Models With Forward-Looking Behavior Closed-Economy Life-Cycle Growth Model Lower government consumption after 2013-846-2,194 Higher taxes after 2013-745-1,817 Open-Economy Life-Cycle Growth Model Lower government consumption after 2013-880-2,013 Higher taxes after 2013-753-1,760 Infinite-Horizon Growth Model Lower government consumption after 2013-775-1,989 Higher taxes after 2013-680-1,587 Macroeconometric Models, Supply-Side Contribution Macroeconomic Advisers-859 n.a. Global Insight-848 n.a. Macroeconometric Models, Supply-Side and Cyclical Contributions Macroeconomic Advisers-877 n.a. Global Insight-933 n.a. ( Continued ) Calculate the average marginal income tax rate on each type of taxable in-# come - wages, interest, dividends, and so on - for each year of the baseline. CBO obtained those rates by applying a tax calculation model to a large sam-ple of the population in 2000. CBO modified the sample over future years to be consistent with the population projections of Social Security's trustees and 3 CBO's economic projections. The model can accommodate the fact that individuals or households face different marginal tax rates depending on their income and family structure. When averaged across all taxpayers, those rates 3. The population sample is based on tax return data from the Statistics of Income Sample for 2000 ( based on about 170,000 returns ) supplemented with about 30,000 records from the March 2001 Current Population Surv...