- #631
Al68
CBO predictions purposefully use "static" modeling for their projections instead of "dynamic" modeling. Static modeling underestimates tax revenues at lower tax rates by ignoring the effect of different tax rates on the tax base. This is way off topic, but actual revenues after tax cuts historically greatly exceed CBO projections, even greatly exceeding the revenues actually collected by the previous higher tax rates.gravenewworld said:You can take the sources with a grain of salt, but one thing is clear. The tax cuts are costing a hell of a lot of money. Maybe they should just let them expire.
Of course those advocating higher taxes will insist on preferring CBO projections to actual historical data, even after the actual data shows the projections to be way off. Some even still try to convince people that the deficits of the 1980's were caused by tax cuts, despite the fact that actual tax revenues doubled during the 1980's.