In the wee hours on Saturday morning during vote-a-rama, the Senate voted on the Portman amendment #154 to the Senate Democrat Budget, and it was agreed to by a vote of 51-48.  The amendment would require the Congressional Budget Office (CBO) to include macroeconomic feedback scoring of tax legislation.  As Congress considers a massive overhaul of the tax code, this is small, but significant victory.

According to Politico, “the vote was a symbolic victory for the think tanks and lawmakers on the right who have been fighting for years to force CBO and JCT to officially endorse the idea that people spend more and invest more when they owe the government less.”

It’s more than that though; it was a victory for taxpayers.

The premise of dynamic scoring is straightforward, as the Heritage Foundation’s Bill Beach explained in 2011 during testimony before the House Ways and Means Committee:

It is difficult to find any serious economist who would argue that the federal government’s tax and spending policies make no difference to U.S. economic performance.  …  Indeed, all across the political spectrum and throughout the leading schools of economic thought, a broad consensus exists that what governments do with tax dollars and how they raise those revenues matters in the larger, dynamic, economic world.

Heritage’s Mike Franc told Politico:

You end up with the status quo becoming a tyranny of sorts.  Tax increases are not viewed as harmful. … People just go ahead and behave like they’ve always behaved, even if there’s another 8 to 12 percent coming out of their pockets. We feel like that’s kind of silly.

Silly indeed.  People obviously react to incentives (and disincentives); if they did not, the Obama administration and Democrats in Congress would not have enacted an individual mandate and punitive taxes as part of Obamacare.

It’s time CBO captured the whole picture, and dynamic scoring would do just that.

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According to CBO, tax increases are not viewed as harmful. That needs to change.

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Conservatives score a small, but important victory in the battle for tax reform!

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What in the world is dynamic scoring and why should I care? Because its my money.

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