On April numbers...

While the salaries and wage base assists budget experts project future revenue performance, other aspects of the income tax returns might not have as much predictive power.  Most notably, the portion of tax base known as “unearned income” is less stable.  This portion of the tax base, which can include dividends and investment earnings, is subject to a great deal of year-to-year variations, depending on changes in taxpayer conditions and the business cycle.  Often, investment earning may not become subject to taxation unless the taxpayer chooses to recognize the gains.  He or she may choose to offset these gains against other investment losses.   And all this activity tends to be concentrated on a small percentage of taxpayers.  Given the range of variables that can affect the unearned income category, no wonder it is hard for budget writers to predict capital gains activity.