Publication Date: July 2007
Publisher: Center on Budget and Policy Priorities (Washington, D.C.)
Author(s): James Horney
Research Area: Banking and finance; Economics
Keywords: Economic projections; Fiscal future; Federal budget
Large mid-year increases in revenue estimates for the current year are not surprising at this point in an economic expansion; history shows they are the norm, not the exception. Such increases occurred in the 1980s following tax cuts, and in the 1990s following tax increases. Not only is today’s re-estimate not a surprise, it tells us nothing about the effects of the 2001 and 2003 tax cuts on the economy.