Projections

Reader comment on: Obama's Trillion-Dollar Tax Increase

Submitted by David Gerstman (United States), Apr 16, 2013 14:24

I'm not an expert on this stuff and you've provided some useful observations about what the government projects these increases will raise and what can reasonably expect to be raised.

But from my experience the most troubling is the cigaretted tax hike. Since it's a sin tax part of the logic of it is to discourage cigarette usage. Does the guess that the tax hike will generate $78 billion over ten years assume an increase in the use of cigarettes or even a stabilization of smoking rates?

In other words, is the $78 billion based on serious analysis? or is it just a nice sounding number derived from superficial analysis? More broadly, were any of the other projections developed through careful economic analyses, or they just simply wishful thinking estimates? Will the government go back after a year or two years and see if the tax hikes are generating the "expected" revenue or will it simply decide that it needs more money and raise more taxes again using flimsy pretexts to justify the hikes?

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