Edward D. Kleinbard is chief of staff and Patrick Driessen is a senior economist for the Joint Committee on Taxation.

The repatriation exemption contained in the 2004 Jobs Act (section 965) offers an opportunity to consider important aspects of the revenue estimating process. The process involved in the estimate of the exemption, the availability of tax and financial data, and recent evaluations of section 965 are factors making this estimate a good example for reviewing the limits of the estimating process, including ex post evaluations of accuracy.

This report discusses JCT staff revenue estimating methodology as it applies generally and as it pertained to section 965, what some recent data indicate about the accuracy of the estimate, and ways in which the public dialogue about revenue estimating could be improved. Our findings are that some choices made in preparing the 2004 estimate seem valid in hindsight, while others seem to have missed the mark. Overall, the data available so far do not confirm nor rebut the accuracy of the JCT staff's 2004 estimate. Any ultimate judgment on that accuracy (and the rationale for section 965) requires rigorous evaluation of a wide range of tax data, not all of which are presently available.

Some recent public interpretations of the data that has become available in recent months are inaccurate both with respect to the estimate and the provision's policy implications. The public dialogue about revenue estimating could be improved through a clearer understanding of the distinction between revenue estimates and government budget receipts.

The views expressed in this report are solely those of the authors, and do not represent the views of the JCT staff as a whole or of any Member of Congress.

Patrick Driessen.

A Revenue Estimate Case Study: The Repatriation Holiday Revisited