Assumes full employment
Diamond's study assumes the Romney tax plan is implemented under conditions of full employment. This is obviously not realistic now or for the immediate future, leading in an over-estimation of the growth-induced boost to tax revenue [UNABLE TO LOCATE THIS IN DIAMOND PAPER]
There is no apparent reference to the full employment assumption in the Diamond paper. Dylan Mathews makes the claim in the cited article, where he thanks Alan Auerbach of the University of California, Berkeley, for pointing it out.
Immediately related elementsHow this works
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Visualizing the Romney Tax Debate »Visualizing the Romney Tax Debate
Romney's plan stated »Romney's plan stated
But does it compute? »But does it compute?
No - it does not compute »No - it does not compute
The TPC case »The TPC case
Growth effect claim »Growth effect claim
Ignores growth potential »Ignores growth potential
Growth-supportive studies »Growth-supportive studies
1. Rosen »1. Rosen
Growth estimate 1 - Diamond study »Growth estimate 1 - Diamond study
Objections to Diamond »Objections to Diamond
Assumes full employment
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