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1 Additional Information About the Effects of Public Law 115-97 on Revenues 1 (October 28, 2019)

handle is hein.congrec/cboefplw0001 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Phillip L. Swagel, Director U.S. Congress Washington, DC 20515 October 28, 2019 Honorable Mike Braun United States Senate Washington, DC 20510 RE: Additional Information About the Effects of Public Law 115-97 on Revenues Dear Senator: I am writing to respond to your question about the effects of the 2017 tax act on federal revenues. In short, revenues in fiscal years 2018 and 2019 were a bit lower than the Congressional Budget Office anticipated in early 2018, but whether that result is related to the effects of the tax act is unknown. Although P.L. 115-97 (originally titled the Tax Cuts and Jobs Act) was enacted in December 2017, CBO first reported estimates of its full effects in April 2018 (see Appendix B in The Budget and Economic Outlook: 2018 to 2028, www.cbo.gov/publication/5365 1). At that time, CBO estimated that the tax act would increase the deficit by $1.9 trillion over the 2018-2028 period. That estimate considered all changes to revenues and outlays, including the effects of macroeconomic feedback and changes in debt-service costs. CBO has not subsequently revised its estimate of the effects of the 2017 tax act on the economy or on federal tax receipts. Nevertheless, the agency continues to evaluate incoming data that provide evidence on the effects of the legislation. In August 2019, CBO described the recent data that have become available and the insights they provide into the effects of the tax changes on revenues (see Box 1-1 in An Update to the Budget and Economic Outlook: 2019 to 2029, www.cbo.gov/publication/55551). Total receipts in 2018 were $8 billion (or 0.2 percent) lower than what CBO initially projected, and receipts in 2019 were $28 billion (or 0.8 percent) lower. In percentage terms, the differences between actual and projected receipts were larger for individual and corporate income tax receipts than for total receipts (see Table 1). Since April 2018, CBO has published four subsequent revisions to its revenue projections; together, those revisions reduced projected revenues over the 2018-2028 period by $700 billion (or 1.5 percent). www.cbo.gov

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