Review of CBO Methodology

If after looking at the graphs I created (based the income data from the Congressional Budget Office) you decide you want to learn more about how the CBO calculates their numbers. You can take a look at an analysis of their report.

The following outlines the components of income included in the CBO's analysis:

* Cash income, taxable and tax exempt, including wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital gains, cash transfer payments, and retirement benefits * Business taxes, including corporate income taxes, the employer's share of Social Security, Medicare, and federal unemployment insurance payroll taxes (imputed to households, as per the assumptions on tax incidence above) * Employees contributions to 401(k) retirement plans * All in-kind benefits (Medicare, Medicaid, employer-paid health insurance premiums, food stamps, school lunches and breakfasts, housing assistance, and energy assistance)

Note that CBO:

* uses the Census Bureau's fungible value measure for government in-kind transfers; * does not adjust capital gains for inflation, and does not include unrealized capital gains or imputed rents on owner-occupied housing (see [1], pp. 23--24); and, * double counts retirement income (see [1], p. 21).

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