Projected Tax Revenue through 2040

 This is the second step in my financial projections which is the calculation of revenue.  I am using 17% of GDP as an average.  (Note that in 2024 the revenue was 16.7% of GDP).  

The CBO in their models assumes that revenue as a percent of GDP will rise almost every year, from 17.1% of GDP in 2025 to 18.6% in 2040 all the way to 19.3% in 2055 if you look at their latest Long-Term Budget Projection.  They don't explain why revenue as a percent of GDP will rise every year.  I think it is wishful thinking on their part. (See my commentary on the Closure Rule).  The 2026 increase could be explained because the Trump tax cuts of 2017 were supposed to end at the end of 2025, but that still doesn't explain why revenue as a percent of GDP will keep rising.  And I think it is likely that the tax cuts will be extended. 

So here is my forecast of tax revenues, with the CBO numbers as a comparison.  I am actually pretty close to their numbers, but slightly less.