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Federal Revenue Forecasting

Authored on: Jan 10, 2012

Download Federal revenue forecasts play an important role in shaping the national debate over future spending and tax policy. Federal revenue forecasts are often very wrong. The basic problem is that revenue forecasting, like hurricane forecasting or earthquake forecasting, is very difficult. The forecasting process consists of many steps and errors are likely to occur in each one. A series of small errors that happen to go in the same direction can make a forecast look incompetent. Large errors that offset each other - even those that could signal incompetence - can make a forecast look brilliant.


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Urban Institute