What Is a Green Book?
The term Green Book refers to a comprehensive guide or report provided by government agencies and bodies. Green Books are used for a variety of purposes depending on the issuing entity. Some Green Books provide guidance on how to deal with and process financial transactions while others may provide the general public with projections about the economy and overall market. These publications are generally updated on a consistent basis and can be found across the globe, including the United States, Canada, and the United Kingdom.
- A Green Book is a guide or report published by government agencies or bodies.
- Green Books can be published for a variety of purposes depending on the issuing entity.
- The purpose and context of a Green Book depend on who issues it.
- In the U.S., Green Books may offer guidance on how to process automated government payments and transfers, or they can provide market projections to the Federal Open Market Committee to help it with monetary policy decisions.
- Green Books are different from other color-noted books, which include the Blue and Beige Books.
How Green Books Work
Green Books are published by various levels of government, including those at the local, state, county, and federal levels. The intent is to provide market participants, such as the general public, investors, corporations, and business leaders, with guidance about a variety of topics.
These books can be found in different parts of the world and may either be physical or online publications. They are commonly published by governments across the United States, Canada, and the United Kingdom, among others. The purpose and context of the book depend on the issuing entity, which means it isn't a one-size-fits-all definition.
For instance, there are a number of different Green Books published in the United States, including:
- A Green Book published by the U.S. Bureau of Fiscal Service with guidance on automated clearinghouse (ACH) transaction transfers and payments
- A Green Book intended for the Federal Open Market Committee (FOMC), which offers market projections to help the board with its monetary policy decisions
- A Green Book that highlights standards for internal controls within federal government agencies
Canada and the United Kingdom also publish Green Books. The Green Book published by the government of Ontario, Canada, offers guidance on construction regulation and occupational health and safety. The British government's Green Book, on the other hand, "provides approved thinking models and methods to support the provision of advice to clarify the social (or public) welfare costs, benefits, and trade-offs of alternative implementation options for the delivery of policy objectives."
The U.S. Treasury also issues a Green Book to explain tax proposals contained in an administration's budget for the given fiscal year.
Types of Green Books
As noted above, the type of Green Book depends on the issuing body. We've listed some of the most common Green Books below.
Federal Reserve Greenbook
The Federal Reserve has several books that provide information about the economy. They help guide members of the FOMC during the decision-making process for monetary policy. Called the Greenbook, it analyses both U.S. and international economies to forecast financial markets. As such, it assesses current economic and financial indicators for the domestic and global economy and provides an outlook.
For example, the September 2008 Greenbook provided a dismal outlook for the domestic and global economies. It predicted a "sharp deceleration" in economic activity in the domestic economy during the third quarter and suggested that the Federal Reserve Board tighten monetary policy until the middle of the following year.
Greenbook data is confidential and is made available to the public five years after the end of the year in which it is released. Archived versions of Greenbook are redacted because they contain sensitive information about the economy.
U.S. Bureau of Fiscal Service Green Book
Today, the vast majority of federal payments and collections are electronic. With few exceptions, federal government transactions are subject to the same rules as private industry ACH payments. The ACH regulation, 31 CFR 210, provides the basis for most of the information contained in the Green Book. However, there are other regulations that affect federal government ACH payments.
ACH is an electronic funds-transfer system run by the National Automated Clearing House Association (NACHA). This payment system deals with payroll, direct deposit, tax refunds, consumer bills, tax payments, and several more payment services. Federal regulations provide guidance for the payment of goods and services with credit and debit cards and other electronic payment instruments.
Automated enrollment is a convenient method for financial institutions using the ACH network to transmit direct deposit enrollment information directly to federal agencies for benefit payments. This is a non-dollar entry sent through the ACH by any receiving depository financial institution to a federal government agency participating in the program. Automated enrollment is preferred by federal benefits agencies as it reduces errors and allows direct deposit payments to begin sooner than paper enrollment methods.
Financial institutions can also enroll for direct deposit via the Go Direct website. The Go Direct campaign was a national marketing and publicity campaign sponsored by the U.S. Treasury and the Federal Reserve that increased the use of direct deposit by federal benefit check recipients. The Go Direct campaign has officially ended, but financial institutions can still use the website to enroll.
Although it is shrinking in size, the Green Book published by the U.S. Bureau of Fiscal Service is designed to deal primarily with exceptions or issues unique to federal government operations. The government no longer prints or mails hard copies of the Green Book, but it is available on the agency's website.
Treasury Department Green Book
The Treasury Department releases the General Explanation of the Administration's Revenue Proposals or the Green Book to accompany an administration's tax proposals contained in a budget. The book is a wish list for fiscal policy since the proposals are proposed legislation and have yet to be introduced and ratified by Congress. Publication ceased between 2017 and 2021 during the Trump Administration. The succeeding Biden administration resumed its publication.
The 2021 edition proposed a series of sweeping reforms to the current tax code. The reforms were meant to tackle inequality and homogenize tax regimes in a global manufacturing setup, where American companies have markets and a supply chain ecosystem that spans multiple jurisdictions.
As such, the publication's tax proposals raised income tax on high-net-worth individuals (HNWIs) and imposed a minimum tax on the earnings of global corporations. They also proposed to cultivate a manufacturing base in America by making changes to international corporate tax rules. Some highlights of the Biden administration’s tax proposals are as follows:
- An increase in the corporate tax rate for C corporations to 28% from the current 21% after Dec. 31, 2021.
- A 15% minimum tax on certain large corporations with global supply chains, markets, and operations.
- An increase in the top individual tax rate to 39.6% from 37%.
- An increase in the long-term dividend rate and qualified dividend income rate to 39.6% from 20% for incomes exceeding $1 million, indexed for inflation. The proposal was implemented retroactively for gains and income realized after April 28, 2021.
- Transfers of appreciated property as gifts were treated as capital gains events at the time of sale and death. This proposal was subject to a $1 million lifetime exclusion.
- Treating income from carried interest as ordinary income subject to self-employment tax.
- Like-kind exchange gain deferrals under IRC Section 1031 that were limited to $500,000 for individuals and $1 million for joint filings.
- Limitations on business losses or the losses from business activities over gains and threshold amount were made permanent under the proposal.
- Repealing the deduction for qualified business asset investment (QBAI) of controlled foreign corporations (CFCs) to eliminate tax deductions for U.S. corporations to locate their assets overseas.
Green Book vs. Other Books
The Green Book is just one type of publication that provides guidance to professionals, businesses, and the general public. The following are some of the other types of books published with colors in their names.
The Blue Book is an automotive industry publication that lists quotes and prices for new and used vehicles. It is used by consumers, car dealers, and lenders who routinely deal with the sale of cars, trucks, and other vehicles. The book, which is also called the Kelley Blue Book, provides users with a price range for vehicles based on their make, model, style, and year. It is updated annually and is used exclusively in North America.
The Beige Book is published by the Federal Reserve. It compiles information about the economy into a comprehensive report. The qualitative report, which is formally called the Summary of Commentary on Current Economic Conditions, is published eight times each year before each FOMC meeting. The committee uses it to make important decisions about the nation's economy.