In response to:

Prophets and Losses: Part II

SD3 Wrote: Feb 06, 2013 5:02 PM
The CBO will always be wrong because one of their forecasting assumptions is that people do NOT change behavior in response to changes in tax law. It's rather like forecasting the second half of a football game by assuming that the teams will do exactly what they did in the first half.

Editor's Note: This column is part II in a series. Part I can be found here.

People on both sides of tax issues often speak of such things as a "$300 billion tax increase" or a "$500 billion tax decrease." That is fine if they are looking back at something that has already happened. But it can be sheer nonsense if they are talking about a proposed increase or decrease in the tax rate.

The government can only raise or lower the tax rate. Whether the actual tax revenues that the government will collect as a result will go up or...