Tax Man Bites Economic Dog

If I wasn't so jaded by this time about such things, this story would actually be a jaw-dropper to me:

Buried deep in the President’s proposals for the Department of the Treasury is a plan to create a Dynamic Analysis Division within the Treasury’s Office of Tax Analysis. This division would advise the President and other key policymakers on how proposed changes to U.S. tax policy would affect economic activity. Inside the Beltway, this type of analysis is called “dynamic scoring.” Outside the Beltway, this is called “economics.”

Yes, you read that correctly. Twenty-five years after the "Reagan Revolution" and five years after Bush the Younger climbed to the proverbial Western summit, dynamic scoring is actually going to start being performed inside the Beltway somewhere besides the fantasies of think tank denizens. Kinda makes sane economic policy sound quasi-raunchy, doesn't it?

Here's the "jaded" part:

So why is this news? Hasn’t the government been studying the effects of tax policy on the economy all along? Aren’t Washington policymakers routinely advised about how tax changes will affect jobs and output and how those, in turn, will affect government revenues?

Surprisingly, the answer is often no. Until very recently, no official Washington agency produced estimates of the economic and tax-revenue effects of proposed tax policies....

Why was this? Because "static" scoring produced a built-in bias toward tax increases and against tax cuts. This despite the predomination of Republican rule in the Executive over the past forty years and Congress over the past decade. The phrase, "It's about time" doesn't begin to express the proper emotional sentiment at this news.

Heritage's William Beach concludes the obvious:

Dynamic scoring might not prevent bad tax policy from becoming law, but it would help. Furthermore, reporting the economic consequences of tax proposals will be enormously helpful in redesigning the tax system. The President has called for fundamental tax reform, and he and Congress will find fundamental reform a much easier exercise if routine and sophisticated dynamic scoring is in place when that task is tackled.

He leaves out how the Democrats will mischaracterize institutionalized dynamic scoring as "book-cooking" and "corrupting the tax code" and all their other vituperative cliches. I, for one, am simply grateful that they'll have something real at which to futilely (hopefully) hurl them.

[HT: CQ]