‘I’ve never seen a government document with a Laffer curve
in it before’, declared Ed Balls last week. Well it looks like he might be seeing a lot
more of them, if George Osborne gets his way. Yesterday, as James noted, the Chancellor
told the Treasury select committee that:
Now, it’s hard to get all that excited about something with a name like ‘dynamic scoring’. It was never going to make the front pages, especially when there’s a ‘pasty tax’ to get worked up about. Many will have the same reaction to a discussion about ‘scoring’ as President Bartlet did: ‘What’s wrong with booze and a comfortable pickup?’‘I think the Treasury can now, and I’ve asked this to happen, start undertaking some real research into dynamic scoring, and what the broader economy effects are of changes to taxation’.
But further consideration of the indirect effects of tax changes could have a profound impact on future budgets.

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