Monday, August 28, 2006
Tweet[IWS] CBO: HOW CBO FORECASTS INCOME [includes DATA] [25 August 2006]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Budget Office (CBO)
Background Paper
How CBO Forecasts Income [25 August 2006]
August 2006
http://www.cbo.gov/ftpdocs/75xx/doc7507/08-25-Income.pdf
[full-text, 46 pages]
[excerpt]
Because federal receipts are determined to a great extent by taxes collected on individual
and business income, this background paper focuses on how CBO projects income
earned by individuals and businesses. It concentrates primarily on CBO's methodology
as it pertains to those categories of individual and business income that are
encompassed within the framework of the national income and product accounts, or
NIPAs (see Appendix A for explanations). Using that framework for projecting income
helps to ensure consistency with CBO's projections of the overall economy.
Includes... TABLES and CHARTS....
Contents
Introduction 1
The National Income and Product Accounts as a Framework 1
The Importance of the Labor Share Assumption 5
An Overview of the Income Categories 8
The Labor Income Share of Gross Domestic Product 9
What Portion of Proprietors' Income Represents Labor Income Versus
Capital Income? 9
How Should Labor's Share of Gross Domestic Product Evolve in the
Projection Period? 9
Projecting the Components of Labor Income 11
The Capital Income Share of Gross Domestic Product 17
Net Income from Abroad 18
Rental and Royalty Income of Persons 21
Net Business Transfer Payments to Persons; Federal, State, and Local
Governments; and Foreign Entities 23
Net Interest Payments by Business to U.S. Residents 23
Consumption of Fixed Capital 25
Corporate Profits 25
Other Income Categories 28
Taxes on Production and Imports by Federal, State, and
Local Governments 28
Surpluses Less Subsidies for Federal, State, and
Local Government-Owned Enterprises 29
The Effect of Policy Changes on CBO's Projections of Income 29
Appendix A: A Summary Description of the Components of Gross
Domestic Income 33
Appendix B: The Effect of NIPA Revisions on the Labor Income Share of
Gross Domestic Product 35
Tables
1. Distribution of Nonfarm Proprietors' Income, 2005 17
2. Returns on Foreign-Owned Assets in the United States and U.S.-Owned Assets Abroad 19
A-1. The Components of Gross Domestic Income 33
Figures
1. Federal Tax Receipts and Wages and Salaries, 1950 to 2005 2
2. The Product and Income Sides of the National Income and Product Accounts, Calendar Year 2005 3
3. The Labor Share of Income in the Corporate Business Sector and the Total Economy, 1950 to 2005 4
4. The Total Share of Labor Income and Its Major Components, 1950 to 2016 10
5. Real Compensation and Productivity, 1950 to 2016 12
6. Proprietors' Income: Farm and Nonfarm, 1950 to 2016 16
7. Net Income from Abroad, 1950 to 2016 18
8. Rental and Royalty Income of Persons, 1950 to 2016 20
9. Business Transfer Payments, 1950 to 2016 22
10. Net Interest Paid by Businesses to U.S. Residents and Foreigners, 1950 to 2016 24
11. Capital Consumption: Private and Governmental, 1950 to 2016 26
12. Corporate Profits: Economic and Book, 1950 to 2016 27
13. Taxes on Production and Imports, by Level of Government, 1950 to 2016 28
14. Net Surpluses of Government Enterprises, by Level of Government, 1960 to 2016 30
B-1. Labor Share of Income Using Different Sets of Historical Data, 1950 to 1995 36
Box
1. The Assumption Underlying the Statistical Discrepancy 6
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Budget Office (CBO)
Background Paper
How CBO Forecasts Income [25 August 2006]
August 2006
http://www.cbo.gov/ftpdocs/75xx/doc7507/08-25-Income.pdf
[full-text, 46 pages]
[excerpt]
Because federal receipts are determined to a great extent by taxes collected on individual
and business income, this background paper focuses on how CBO projects income
earned by individuals and businesses. It concentrates primarily on CBO's methodology
as it pertains to those categories of individual and business income that are
encompassed within the framework of the national income and product accounts, or
NIPAs (see Appendix A for explanations). Using that framework for projecting income
helps to ensure consistency with CBO's projections of the overall economy.
Includes... TABLES and CHARTS....
Contents
Introduction 1
The National Income and Product Accounts as a Framework 1
The Importance of the Labor Share Assumption 5
An Overview of the Income Categories 8
The Labor Income Share of Gross Domestic Product 9
What Portion of Proprietors' Income Represents Labor Income Versus
Capital Income? 9
How Should Labor's Share of Gross Domestic Product Evolve in the
Projection Period? 9
Projecting the Components of Labor Income 11
The Capital Income Share of Gross Domestic Product 17
Net Income from Abroad 18
Rental and Royalty Income of Persons 21
Net Business Transfer Payments to Persons; Federal, State, and Local
Governments; and Foreign Entities 23
Net Interest Payments by Business to U.S. Residents 23
Consumption of Fixed Capital 25
Corporate Profits 25
Other Income Categories 28
Taxes on Production and Imports by Federal, State, and
Local Governments 28
Surpluses Less Subsidies for Federal, State, and
Local Government-Owned Enterprises 29
The Effect of Policy Changes on CBO's Projections of Income 29
Appendix A: A Summary Description of the Components of Gross
Domestic Income 33
Appendix B: The Effect of NIPA Revisions on the Labor Income Share of
Gross Domestic Product 35
Tables
1. Distribution of Nonfarm Proprietors' Income, 2005 17
2. Returns on Foreign-Owned Assets in the United States and U.S.-Owned Assets Abroad 19
A-1. The Components of Gross Domestic Income 33
Figures
1. Federal Tax Receipts and Wages and Salaries, 1950 to 2005 2
2. The Product and Income Sides of the National Income and Product Accounts, Calendar Year 2005 3
3. The Labor Share of Income in the Corporate Business Sector and the Total Economy, 1950 to 2005 4
4. The Total Share of Labor Income and Its Major Components, 1950 to 2016 10
5. Real Compensation and Productivity, 1950 to 2016 12
6. Proprietors' Income: Farm and Nonfarm, 1950 to 2016 16
7. Net Income from Abroad, 1950 to 2016 18
8. Rental and Royalty Income of Persons, 1950 to 2016 20
9. Business Transfer Payments, 1950 to 2016 22
10. Net Interest Paid by Businesses to U.S. Residents and Foreigners, 1950 to 2016 24
11. Capital Consumption: Private and Governmental, 1950 to 2016 26
12. Corporate Profits: Economic and Book, 1950 to 2016 27
13. Taxes on Production and Imports, by Level of Government, 1950 to 2016 28
14. Net Surpluses of Government Enterprises, by Level of Government, 1960 to 2016 30
B-1. Labor Share of Income Using Different Sets of Historical Data, 1950 to 1995 36
Box
1. The Assumption Underlying the Statistical Discrepancy 6
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 9:17 AM
