The CBO said? LOL @ the CBO, have they ever gotten anything right? I mean these are the guys that said SS would be funded forever, OBamacare would cost $1 and all our troubles were over.
ONly a idiot would rely on what the CBO saYS.
I can't really blame the CBO for being wrong, they are actually pretty brilliant number crunchers. They can only score what they know, human behavior is pretty tough to predict which makes scoring nothing more than a guess.
Laffer says the biggest mistake they made when Reagan revamped the tax code was postponing the new tax laws. It was unexpected the amount of people who would defer profits until the next year when they went into effect. There was an immediate slow down in the economy after the new bill was signed. The CBO came in over on their revenue projections for the year because of this. The following year projections were based present numbers with a base growth of GDP but our economy exploded so the projections came in low.
They look at like this, if I make 10k and the government take is 2500 and they raise my tax rate to 3000 they can only predict an increase of 500. What they can't account for is I may work less overtime because it's not worth it to me anymore since I'm getting less for it or I may work more overtime to make up the difference. If I make any changes at all in my behavior their projections are off.
For this reason projecting increase or decrease in revenues based on taxes is a fools folly. If we could predict human behavior Keynesian economics would actually work. We look at history and say X caused Y and base our predictions based on doing X. We can't predict the rest of the alphabet though, attacks on our soil, droughts, a capital strike, election results etc and how we behave to each. It's fun to keep trying though, even though a 10 year out projection is impossible. If they ever did get one right it would be pure blind luck.
Don't hate the CBO for being wrong all of the time, they are just math guys plugging in numbers based on what's in front of them. They are very very good at this part.
Edit: I agree with you about not relying on their predictions but idiot is strong. Naive, uninformed or desperate to win an argument are other reasons as well as being an idiot.