What are dynamic scoring and dynamic analysis? Q.What are dynamic scoring and dynamic analysis? A.Tax, spending, and regulatory policies can affect incomes, employment, and other broad measures of economic activity. Dynamic analysis accounts for those macroeconomic impacts, while dynamic scoring uses dynamic analysis in estimating the budgetary impact of proposed policy changes. Read more about What are dynamic scoring and dynamic analysis?
How do financing methods affect the long-run burdens of tax cuts? Q.How do financing methods affect the long-run burdens of tax cuts? A.Tax cuts are financed through reductions in current outlays or higher government debt that will eventually have to be repaid. But the distributional effect of reduced government services and the debt are excluded from standard distributional tables. Read more about How do financing methods affect the long-run burdens of tax cuts?
How do taxes affect income inequality? Q.How do taxes affect income inequality? A.Because high-income households pay a larger share of their income in total federal taxes than low-income households, federal taxes reduce income inequality. But federal taxes have done little to offset increasing income inequality over the past 40 years. Read more about How do taxes affect income inequality?