One of the reasons I began blogging involves my frustration with the current political scene, in which endless demagoguery and wishful thinking has replaced fact based narrative, and this is true for all sides of debate. For example, on the subject of dynamic scoring and revenue feedback, there is endless lunacy coming from both sides.
Left-wing pundits, politicians, and others accused Republicans of cooking the books. Most seem to prefer static scoring, believing either that static scoring is more accurate as taxes have little to no effect on the economy, or that dynamic scoring is too difficult to estimate given the wide range of growth estimates of our current tax literature. The latter is certainly a substantial criticism, but I would note that choosing a method of scoring that might be wrong is still preferable to that of which is guaranteed to be wrong. As long as dynamic scoring provides a wide range of estimates, I don't think there's much of a problem there. The media certainly won't allow the GOP to get away with using the top estimate for growth and revenue feedback. The former criticism is pure nonsense. See, for instance, this IGM experts poll. Revenue feedback exists - disincentives for reporting taxable income are reduced when taxes are lowered, resulting in less tax avoidance/evasion, and more hours worked, investment, and savings.
Of course the existence of revenue feedback and growth effects then results in hard-line supply-siders making insane claims about how tax cuts will always pay for themselves, or that they always pass a cost-benefit analysis. Hopefully the recent Kansas experiment, or the results of the Bush Tax cuts, in which even the right-wing Tax Foundation's analysis found that only 40% of the tax cuts for the rich (let alone the poor and middle class, who have less ability to change hours, save/invest, etc.) was paid for from improved incentives and growth, has gotten some to change their minds on this topic. But if that doesn't convince hardliners, who stick to "evidence" like the Reagan tax cuts, not noting that the increase in total federal receipts was lower than in the '70s or '90s, and that some of Reagan's tax cuts were offset by tax hikes, such as the payroll tax increase, then I have to ask, what about a reduction from a 1% flat tax to a .001% flat tax? There has to be some point where hardcore conservatives agree there are diminishing returns to this.
This kind of thinking is dangerous for tax cut supporters, overestimating growth and revenue effects dramatically and constantly will result in decreased public support for tax cuts. It may also reduce the impact of the tax cut, as if not paid for the large deficits can crowd out the increased private investment and savings produced by a tax cut. Both sides need to get real on dynamic scoring and taxation as a whole, so we can finally move to a less inefficient system that is still capable of raising the revenue needed in the coming decades of slow-growth and an aging population.
