CBO’s economic forecast reflects current law, including the expiration, at the end of 2025, of certain provisions of the 2017 tax act that made significant changes to the individual tax system. Outside forecasters tend to incorporate different assumptions about policy. Namely, they account for some probability of those provisions’ being extended.

To allow for more accurate comparisons of its forecast with the forecasts of other organizations, CBO has analyzed how the expiration of those provisions affects the economy and budget in the projections that it published in February 2024.

• Expiration modestly reduces the supply of labor by raising tax rates on individual income.
• The increase in tax revenues stemming from expiration reduces federal deficits and borrowing and, in turn, increases private investment.
• On net, those two effects largely offset each other, resulting in very small changes to gross domestic product.