The Heritage Foundation

News Releases on Taxes

January 9, 2003

January 9, 2003 | News Releases on Taxes

Switch To "Dynamic Scoring" Will Completely Alter Future Tax Debates

WASHINGTON, JAN. 9, 2003-The Heritage Foundation today released the following statement by William Beach, director of the Center for Data Analysis, regarding the new rules in the U.S. House of Representatives that require the use of "dynamic scoring" to help lawmakers better gauge the economic effect of proposed tax legislation:

"President Bush's new economic plan, officially unveiled Jan. 7, drew so much media attention that it nearly eclipsed an important change made the same day, one that likely will have a far more profound effect on the health of our economy than even the president's plan.

"By endorsing 'dynamic scoring,' House members have shown they're willing to inject a much-needed shot of reality into future tax-law debates.

"Until now, federal offices charged with estimating the economic impact of tax bills provided only 'static scoring' analyses to lawmakers. 'Static scoring' assumes tax cuts or tax hikes have no effect on how much taxpayers spend and invest their money. Not surprisingly, experience shows this assumption is completely off-base.

"'Dynamic scoring' is a far more realistic approach-an analytical tool that CEOs and many state governors have used successfully for years.

"Finally, lawmakers will have a more realistic idea of how major tax legislation will affect the economy. They can cast their votes more confidently, knowing that the estimates that flow from 'dynamic scoring' will be far closer to reality than the wildly inaccurate ones produced by 'static scoring.'

The dynamic-scoring rule also will make government decision-making more transparent and democratic than it was when unelected Hill staffers could control the nation's tax agenda by refusing to reveal the assumptions behind their tax-revenue estimates."

Click here for more detailed information on dynamic scoring.

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