The new Republican-controlled Congress convened for the first
time on Jan. 6, and Republicans in the House of Representatives
immediately adopted a new rule for how to score tax legislation.
The change may make it easier to reform the tax code or pass tax
cuts.
The rule was adopted on a party line vote and requires the Joint
Committee on Taxation (JCT) to address the overall economic impact
of tax changes when estimating the revenue effects of those
changes. This estimation technique, called "dynamic
scoring," could reduce the estimated cost of tax legislation
if the JCT projects that the legislation will help grow the
economy, thereby raising additional revenue.
The Budget Control Act of 1974 requires the JCT to provide a
revenue estimate for all tax bills considered by the House and
Senate, making JCT the official scorekeeper of all tax legislation.
The JCT has long factored the behavioral effects of tax changes
into its scores. It has also previously estimated
