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Our friend Dan Clifton of the American Shareholders Association reminds us that tomorrow the Congressional Budget Office comes out with its 2007 Budget and Economic Outlook. Sadly, the Congressional Budget Office is about as competent at economic forecasting as most congressional offices are in their respective functions -- which is to say, not very.

...this report becomes the numbers used all year by the press and politicians. So American Shareholders Association did an analysis of their accuracy in one year forecasting and since the 2003 tax cut. The January CBO forecast underestimated total tax collections in a fiscal year by an average of $85 billion per year in the past three years (largely the result of non wage income and corporate tax collections). Further, we found the baseline is now $200 billion higher since initially forecasted four months after the 2003 tax cut. Simply put the numbers tomorrow will be an underestimation of what the revenue picture will look like at the end of this fiscal year...

Also of note the report will document updated capital gains tax collection numbers. Last year showed CBO wildly underestimated cap gains collections and the numbers showed the capital gains tax cut paid for itself 16 times over. Based on non-wage income tax collections we are expecting

a blowout number tomorrow which will be even higher than last years numbers.

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