Skip to main content
  • Experts
  • Events
  • Briefing Book
  • Resources
  • About
  • Contact
  • Support
  • Fiscal Facts
Twitter
Facebook
Logo Site
  • Topics
    • Individual Taxes
    • Business Taxes
    • Federal Budget and Economy
    • State and Local Issues
    • Campaigns, Proposals, and Reforms
  • TaxVox Blog
  • Research & Commentary
  • Laws & Proposals
  • Model Estimates
  • Statistics
  • Features
Brief

Why Individual Income Tax Revenues Grow Faster Than GDP

James R. Nunns, Jeffrey Rohaly
September 1, 2015
Download PDFPrint
Share

Primary tasks

  • Overview(active tab)
  • Full Report

Abstract

Using the latest long-term budget projections from the Congressional Budget Office, we project that individual income tax revenues under current law will increase as a share of GDP from a little over 9.5 percent in 2025 to a little less than 13.3 percent in 2090, an increase of over 3.7 percentage points. This paper describes the factors that explain this differential in growth rates and provides estimates from the Tax Policy Center’s new long-run microsimulation model of the relative importance of each of these factors over the 2025-2090 period. We find that 80 percent of the increase in revenues as a share of GDP occurs because current law does not adjust some individual income tax parameters for inflation and none of the parameters for changes in real income.

Research Area

Individual Taxes Income tax (individual)
To reuse content from the Tax Policy Center, visit copyright.com, search for the publications, choose from a list of licenses, and complete the transaction.

Meet the Experts

  • James R. Nunns
    Urban Institute Associate
  • Jeffrey Rohaly
    Principal Research Associate
Research report

New Evidence on The Effect of The TCJA On the Housing Market

Robert McClelland, Livia Mucciolo, Safia Sayed
March 30, 2022
  • Donate Today
  • Topics
  • TaxVox Blog
  • Research & Commentary
  • Laws & Proposals
  • Model Estimates
  • Statistics
  • Privacy Policy
  • Newsletters
Twitter
Facebook
  • © Urban Institute, Brookings Institution, and individual authors, 2022.