'Tax Cuts Still Don’t Pay for Themselves'

[finehoe]

The new tax plan from Senator Marco Rubio and Senator Mike Lee... calls for big tax credits for middle-income families with children, corporate tax cuts and complete elimination of the capital gains tax — and as a result would cost trillions of dollars in revenue over a decade.
Or would it? The Tax Foundation released a report last week arguing the Rubio-Lee plan would generate so much business investment that, within a decade, federal tax receipts would be higher than if taxes hadn't been cut at all. ...
I discussed the Tax Foundation report with 10 public finance economists ranging across the ideological spectrum, all of whom said its estimates of the economic effects of tax cuts were too aggressive. "This would not pass muster as an undergraduate's model at a top university," said Laurence Kotlikoff, a Boston University professor whom the Tax Foundation specifically encouraged me to call. ...
[T]he House adopted a rule in January that requires "dynamic scoring" of tax bills... In principle, dynamic scoring is fine. Tax policy really does affect the economy... But as the Tax Foundation report shows, dynamic scoring can be misused: You can get essentially any answer you want ... by changing the assumptions...
The crucial thing to watch, in the guts of future C.B.O. reports that rely on dynamic scoring, will be whether the new dynamic assumptions are more reasonable than zero — or whether, like the Tax Foundation assumptions, they take us farther away from accuracy, and make unsupportable promises of tax cuts paying for themselves.

http://www.nytimes.com/2015/03/17/upshot/tax-cuts-still-dont-pay-for-themselves.html

[Gunnar]

Seeing how corporations are already quite inventive when it comes to not paying taxes, I am not sure how much good that would do.

In addition, the question is where the freed funds would create investments...

[Non-RedNeck Westsider]

Seeing how corporations are already quite inventive when it comes to not paying taxes, I am not sure how much good that would do.

In addition, the question is where the freed funds would create investments...

Reminded me of an article I read years ago...

G.E.'s Strategies Let It Avoid Taxes Altogether

[spuwho]

Cutting taxes to reach some idealogical goal is a non starter, just ask the State of Kansas.

Tax changes always should be fully vetted and understood before they are implemented.

Also, financial instruments are way more comprehensive today than they were just 20 years ago, so changing a corporate tax arrangement may not have the cache it once did.

Generic political promises of not raising or cutting taxes doesnt carry the same impact today as in years past.  The politicos are going to have to be more specific in what those promises will deliver.

[Gunnar]

What I would love to see is a politician who actually promises a good return on the tax money, i.e. that whatever funds the (local, state,...) govt collects is spent wisely...

Personally, I have no issue paying taxes if they are a) not excessively high but more importantly b) I get a good return on the taxes I pay, i.e good infrasstructure, services...