The Role of Dynamic Scoring in the Federal Budget Process: Closing the Gap between Theory and Practice
This paper discusses several issues that arise in the process of analyzing the macroeconomic effects of tax policy proposals in a way that is of practical use to legislators. In the current federal legislative process, much of the economic analysis of tax legislation boils down to a single set of nu...
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| Veröffentlicht in: | The American economic review 2005-05, Vol.95 (2), p.432-436 |
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| creator | Altshuler, Rosanne Nicholas Bull John Diamond Tim Dowd Pamela Moomau |
| description | This paper discusses several issues that arise in the process of analyzing the macroeconomic effects of tax policy proposals in a way that is of practical use to legislators. In the current federal legislative process, much of the economic analysis of tax legislation boils down to a single set of numbers: an estimate of the effects of the proposal on projected federal revenues over the ten-year period following the current fiscal year. The authors discuss some of the practical aspects of developing a methodology for "dynamic scoring" or accounting for potential macroeconomic effects in the estimate of the revenue costs of a specific tax proposal. The authors discuss often-overlooked practical issues in incorporating those effects in a revenue estimate. The authors also show how the effects of proposed tax changes on GDP and revenues can vary depending on the methodologies chosen to address each of these issues. |
| doi_str_mv | 10.1257/000282805774669754 |
| format | Article |
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| ispartof | The American economic review, 2005-05, Vol.95 (2), p.432-436 |
| issn | 0002-8282 1944-7981 |
| language | eng |
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| source | Business Source Complete; Jstor Complete Legacy; American Economic Association Web |
| subjects | Aggregate analysis Aggregates Average tax rate Disposable income Dynamic models Dynamic Scoring Economic development Economic forecasting Economic theory Estimated taxes Federal budget Fiscal policy GDP GNP Gross Domestic Product Gross National Product Income taxes Internal Revenue Code Labor supply Macroeconomic modeling Macroeconomics Marginal tax rate Modeling Policy analysis Proposals Public finance Simulation Studies Tax policy Tax rates Tax returns Tax systems Taxable income Taxpayers Taxpaying U.S.A Wages & salaries |
| title | The Role of Dynamic Scoring in the Federal Budget Process: Closing the Gap between Theory and Practice |
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