By Steve Forbes
Excerpt from Forbes.com:
House Republicans: You have just pulled off one of the most astonishing acts of political self-immolation in history. You have unnecessarily damaged the nascent Trump presidency. Here are four suggestions to avoid a repeat performance with tax cuts.
–Stop worshipping the Congressional Budget Office (CBO). You foolishly took up the difficult, complex subject of reforming health care before cutting taxes, because you thought that the CBO’s “scoring” of your RyanCare bill would give you extra revenue for tax reductions.
Doing that ranks right up there with some of the stranger rituals and superstitions of long ago tribes and civilizations.
News flash: CBO estimates of the financial impact of various pieces of legislation over a ten-year period are not similar to Moses bringing down tablets from on high. In fact, they’re less useful than daily horoscopes. The accuracy of the CBO’s prescriptions are almost on a par with those of the Federal Reserve, which has been forecasting boom times for almost a decade.
One example of the oracular powers of the CBO: It predicted that 13 million people in 2015 would buy insurance on the ObamaCare exchanges. Only 11 million did. It gets better. The CBO said the number would increase to 24 million in 2016; the actual result was 12 million.
The CBO has notoriously scored cuts in the capital gains tax rates as revenue-losers, even though every time those rates have been cut has resulted in higher receipts. The agency is guilty of “static scoring,” whereby reductions in the tax rates have little or no positive impact on economic growth, despite all real-world experiences to the contrary. Republicans gained control of Congress in 2014 and should have radically overhauled the CBO’s absurd models. You guys wimped out: Only minor changes were made. This was almost on par with the GOP’s doing nothing about static scoring in 1994, when it took control of both houses of Congress for the first time in four decades, a strange omission for a party that professes a love of lower taxes.
Why have you done next to nothing to correct the myth that the CBO’s prophecies have any relation to reality? The agency is a perpetrator of Big Government.
Tax cuts done the right way à la John Kennedy and Ronald Reagan will play a crucial role in boosting U.S. economic growth rates to 4% to 5%, which is hardly a stretch after a decade of under 2%, way below our historic average of 3.3% to 3.5%.
Tell the CBO to take a hike, and plug in 4% to 5%. You’ll love the results.
Read more at Forbes.com.
Photo Credit: Gage Skidmore