In 10 years, per capita purchasing power in Greece will be higher if — rather than continuing to service its debts over the next decade and complying with the budget rules currently in place — it refuses to accept a continuation of its current troika program and explicitly defaults on its debt held by the official sector.
Changing federal income tax rates, or the income bases to which those rates apply, can affect federal tax revenues partly by altering people’s behavior, and thus their actual or reported incomes.
To the extent that a given tax change might affect revenues partly by affecting national-income growth, existing research provides enough guidance to generate informative bounds on the size of any growth-driven revenue effect.
For large proposed changes in tax rates or the tax base, official revenue forecasts provided to Congress would probably be more accurate if the CBO and JCT tried to estimate fully how the proposed tax changes would affect growth-driven revenue.
