Focus Point - Dynamic ScoringCommentary by Pete du Pont
March 12, 2001
I'm Pete du Pont with the National Center for Policy Analysis. The Bush tax cut is center stage, so this week let's look at it from some different perspectives.
The Heritage Foundation's Center for Data Analysis conducted a dynamic simulation of the plan's proposals.
Dynamic Analysis assumes money returned to people doesn't just sit there; it's put to use, spent or invested. The study found an average family of four's inflation-adjusted disposable income would increase by $4,700 by 2011.
The National debt would effectively be paid off by 2010. The plan would save the entire social security surplus while the Federal Government accumulated $2 trillion in uncommitted funds which could be used to fix social security and medicare.
Most other analyses rely on "static" budget estimates that ignore interest rates, employment, hours worked, personal income, and savings that would result from a reduction in tax rates.
In other words, they ignore the real world. When we don't, we see what a pro-growth proposal the Bush plan really is.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, the wrong way to fix taxes.