Technical

Modeling Practices and Their Ability to Assess Tax/Expenditure Economic Impacts

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Study Overview

This report reviewed five economic models (IMPLAN, TRAIN/Dynamic TRAIN, STAMP, DRAM, and REMI) to assess their usefulness in appraising behavioral responses as an aid to evaluating proposed tax legislation. Every model was thoroughly explained, including numbered lists of advantages and disadvantages for each. The report revealed some important issues to consider when using these models, such as the belief that the price effect on consumption of a tax change is one of the most important ‘behavioral’ responses, it is critical that