11th
Questions worth investigating: budget scoring and bill-authoring pressure
Paul Krugman has me thinking about the efficiency and equity of the proposed excise tax on insurance. But his call to vary the “Cadillac plan” tax-deductible ceiling by region and age got me pondering a more abstract question: are complex tax structures (even when more efficient and equitable) more politically challenging in the Upton Sinclairesque* factory floor we call the legislative process?
And so I present another episode of the Dave-patented, internet-approved serial QUESTIONS WORTH INVESTIGATING, with the requisite stylistic nod to John Hodgman.
How does the institutionalization of budget scoring impact the content of bills?
This leads to more intriguing component questions:
- Does a CBO-like institution incentivize particular fiscal structures over others (on both the revenue and cost sides)?
- Is there greater incentive to make these budgetary structures simpler (thereby easier to score) or to make them more complex (obscuring potential costs)?
- Does budget-scoring disincentivize efficient tax structures simply due to the uncertainty and political costs of scoring complex bills (e.g., actuarial calculations that are costly to produce) or is it the contrary/no effect?
- Is there a big distinction between national [CBO] scores and state-level fiscal notes?
- What is the variation across states? What institutional or methodological differences foster this?
- How has the CBO shaped fiscal structures of bills over time?
Question #3 seems to me both the most salient from a policymaking perspective, as well as the most interesting (and yes, the question is a tad leading, but only for scope purposes).
My Peets-fueled impressionistic answer would be that it is more likely for efficient-but-complex structures to suffer strong disincentives at the state-level, for two reasons:
- State-level fiscal analysts have fewer and less-advanced forecasting resources available to them.
- Fiscal cost is more politically dangerous at the state-level during deficits because, well, they can’t just fire up the printing presses. So the devil you know (easily forecasted costs) may be more easily passed than the devil you don’t — admittedly this is the core assumption, and it could push the ball either way.
* Yes, I’m calling the Senate unsanitary; the House, however, easily wins in terms of pungency.
