CBO’s Revenue Forecasting Record, November 10, 2015.

“To prepare the baseline budget projections on which much of its analysis is based, the Congressional Budget Office must regularly produce revenue forecasts. As a part of that process, the agency assesses the accuracy of its past projections and continually refines its methods for projecting revenues to attempt to make them more accurate. This report examines the accuracy of CBO’s revenue projections since 1982, the earliest year for which the information necessary to assess the forecasts is available. On average, the agency’s projections have been a bit too high—more so for projections spanning six years than for those spanning two—owing mostly to the difficulty of predicting when economic downturns will occur. The overall accuracy of CBO’s revenue projections has been similar to that of the projections of other government agencies. How Accurate Have CBO’s Two-Year Revenue Projections Been? On average, CBO has overestimated total revenues by 1.1 percent in its two-year projections—those that provide estimates of revenues for the fiscal year following the year in which they are released. A misestimate of that size in its January 2015 baseline projection, for example, would amount to $37 billion out of the roughly $3.5 trillion in total revenues that CBO projected for fiscal year 2016. Overestimates and underestimates offset one another in the mean error measure, so that average overestimate of 1.1 percent over the past three decades includes projections for years in the latest recession for which CBO overestimated revenues by as much as 25 percent and projections for the late 1990s and the mid-2000s for which CBO underestimated revenues by nearly 10 percent (see the figure below). The calculation of those errors—and of all such measures cited in this report—includes an adjustment to remove the estimated effects of legislation enacted after the projections were produced. That adjustment is necessary because the baseline projections incorporate the assumption that current laws governing taxes will generally not be modified by future legislation.”