As the President signs the latest taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. cut bill today, much discussion has centered on the economic growth consequences—both short-run and long-run—of such tax cuts, as well as the revenue implications. Many economists have discussed to what extent, if any, static analysis of the extended tax cuts overstates their foregone revenue costs.
For those unfamiliar with the issue or those merely seeking further reading on the topic, we‘ve assembled a collection of articles (some technical, some general) on the issue of “dynamic scoringDynamic scoring estimates the effect of tax changes on key economic factors, such as jobs, wages, investment, federal revenue, and GDP. It is a tool policymakers can use to differentiate between tax changes that look similar using conventional scoring but have vastly different effects on economic growth. .” We’ve attempted to provide a balanced compilation of the literature, focusing on the main players in the dynamic scoring debate over the past thirty years, including Alan Auerbach, Martin Feldstein, and Arthur Laffer.
Note this collection includes only literature that is freely available on the web, and excludes many academic articles available only through services such as JSTOR.
Dynamic Scoring: An Introduction to the Issue, by Alan Auerbachhttp://emlab.berkeley.edu/users/auerbach/dynamscor.pdf
Static vs. Dynamic Scoring, American Enterprise Institute Event (November 2003), includes video, transcripts, and summary of event, which included, among others Auerbach, Martin Feldstein, Bill Gale (Brookings), Kevin Hassett (AEI), Douglas Holtz-Eakin, and Benjamin Page.http://www.aei.org/events/filter.all,eventID.662/event_detail.asp
Overview of Revenue Estimation Procedures and methodologies Used by the Joint Committee on Taxationhttp://www.house.gov/jct/x-1-05.pdf
Dynamic Scoring: A Back-of-the-Envelope Guide (fairly technical using economic growth theory), by Greg Mankiw and Matthew Weinzierlhttp://post.economics.harvard.edu/faculty/mankiw/papers/dynamicscoring_05-1212.pdf
Dynamic Scoring: Alternative Financing Schemes (technical), by Eric Leeper and Shu-Chun Susan Yanghttp://www.nber.org/papers/w12103.pdf
Macroeconomic Implications of Federal Budget Proposals and the Scoring Process, by Peter Orszaghttp://www.brook.edu/views/testimony/Orszag/20020502.pdf
The Role of Dynamic Scoring in the Federal Budget Process: Closing the Gap between Theory and Practice, by Rosanne Altshuler, Nicholas Bull, John Diamond, Tim Dowd and Pamela Moomauhttp://www.aeaweb.org/annual_mtg_papers/2005/0107_1430_1302.pdf
Methodology and Issues in Measuring Changes in the Distribution of Tax Burdenshttp://www.house.gov/jct/s-7-93.pdf
The Effect of Taxes on Efficiency and Growth, by Martin Feldsteinhttp://www.nber.org/papers/w12201
The Laffer Curve (Wiki entry)http://en.wikipedia.org/wiki/Laffer_curve
On the Analytics of the Dynamic Laffer Curve, by Jonas Egell and Mats Perrsonhttp://www.iies.su.se/publications/seminarpapers/682.pdf
CBO Testimony on Federal Budget Estimating (May 2002)http://www.cbo.gov/showdoc.cfm?index=3422&sequence=0http://www.cbo.gov/showdoc.cfm?index=3511&sequence=0http://www.cbo.gov/showdoc.cfm?index=3384&sequence=0
The Case for Dynamic Scoring, Bruce Bartlett (2002, National Review Online)http://www.nationalreview.com/nrof_bartlett/bartlett050602.asp
Dynamic Scoring: Not So Fast!, by Rudolph Pennerhttp://www.taxpolicycenter.org/publications/template.cfm?PubID=9698
Greenspan Comments on Dynamic Scoring (testimony from 2002)http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=107_house_hearings&docid=f:81696.wais
Bernanke Comments on Dynamic Scoringhttp://www.taxfoundation.org/legacy/show/1462.html