NSBA Promotes Use of Dynamic Scoring

October 5, 2011

In its Statement to the Ways and Means Committee, the NSBA urged the Joint Committee on Taxation to take into account real world economic effects of proposed tax legislation when scoring these proposals for budget purposes.  By ignoring the positive economic effects of fundamental tax reform, the current scoring method requires higher tax rates than would be necessary in the real world to raise the same amount of revenue.  This makes it more difficult to achieve tax reform.  The current method, which ignores real world economic effects, also makes tax rate increases appear to raise more revenue than they actually will and marginal tax rate cuts appear to cost more than they actually will.