bq. Will tax cuts bring a bloom of free enterprise — or exploding deficits? Economists have studied the issue ad nauseam, but firm conclusions are elusive. It is difficult to tease out cause and effect, because at any given time, economic conditions other than taxation also shape behavior.
bq. If only there were a scientific way to determine the real impact of taxation on industriousness, labor supply, and innovation.
bq. According to some scholars, there is. Randomly assign a representative sample of the population — say, 10,000 taxpayers — a lower tax rate, and see what happens. Did these Americans, on average, behave any differently than their counterparts? Did they work longer hours or more jobs, start more businesses, hire more employees?
bq. In other words, test government policies using the same technique — randomized controlled trials — used to test new drugs.
“More”:http://www.boston.com/bostonglobe/ideas/articles/2010/12/12/law_lab/?page=full is at the Boston Globe. The author is Rebecca Tuhus-Dubrow.
[Hat tip to Daniel Lippman]