Why is it so hard to decide how much a candidate's tax plan costs?

Why figuring out tax plan costs is difficult.

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published 19 February 2016

Over the next decade, Sen. Ted Cruz's tax plan could cost $8.6 trillion—or just $768 billion. Both estimates come from respected, non-partisan tax think tanks. So why are they wildly different?

Considering this question Friday at FiveThirtyEight, Ben Casselman notes that the Cruz estimates are perhaps an extreme disparity, but varying estimates are not uncommon:

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Most of the variety stems from "the broader economic impact of the various plans," he says, because "[c]hanges in tax policy have far-reaching ripple effects on the economy," which in turn affect revenues. That explains the difference between the static and dynamic estimates in the above chart — only the dynamic ones attempt to forecast how the candidates' plan will change the economy. That forecasting involves a greater degree of opinion and uncertainty than simply running the numbers for a static model, so economists' differing views can more significantly influence predictions.

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Bonnie Kristian was a deputy editor and acting editor-in-chief of TheWeek.com. She is a columnist at Christianity Today and author of Untrustworthy: The Knowledge Crisis Breaking Our Brains, Polluting Our Politics, and Corrupting Christian Community (forthcoming 2022) and A Flexible Faith: Rethinking What It Means to Follow Jesus Today (2018). Her writing has also appeared at Time Magazine, CNN, USA Today, Newsweek, the Los Angeles Times, and The American Conservative, among other outlets.

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