A $2 Trillion Error
When tax cuts are proposed, someÃ‚Â Members of Congress andÃ‚Â outside agencies clamorÃ‚Â about how much the cutsÃ‚Â willÃ‚Â deplete the government coffers. The Wall Street Journal reports, though,Ã‚Â that the CBO and Joint Tax Committee managed to underestimate tax revenue by $2.04 trillion over the last ten years. It seems as though their outdated method of forecasting, in which theyÃ‚Â didn’tÃ‚Â take into account the economic growth caused by tax cuts,Ã‚Â led them to makeÃ‚Â this gross underestimation. PerhapsÃ‚Â the CBO and JTC should have a look at this article on dynamic analysisÃ‚Â and throw their old models out.