Understanding forecasting errors in State Personal Income Tax revenues the role of capital gains Asa Ferguson, Liam Marshall and Jonathan C. Rork
By: Ferguson, Asa
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Contributor(s): Marshall, Liam | Rork, Jonathan C.
Material type: 
ArticleSubject(s): IMPUESTOS | RENTA | RENDIMIENTOS DE CAPITAL | ERROR | RECAUDACION | INGRESOS FISCALES | ESTADOS UNIDOS
In:
Public Finance Review v. 51, n. 5, September 2023, p. 649-668Summary: Many states face challenges in producing accurate forecasts of tax revenue from personal income. Using data from 1996 to 2019, we look at how growth in the various base components of personal income influence the accuracy of a state's forecast of revenue from personal income taxation. We consistently find growth in capital gains, which has the highest year-to-year volatility among personal income components, to be associated with a state underestimating its actual revenues from personal income by at least 2 percentage points.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
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Many states face challenges in producing accurate forecasts of tax revenue from personal income. Using data from 1996 to 2019, we look at how growth in the various base components of personal income influence the accuracy of a state's forecast of revenue from personal income taxation. We consistently find growth in capital gains, which has the highest year-to-year volatility among personal income components, to be associated with a state underestimating its actual revenues from personal income by at least 2 percentage points.
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