Dynamic scoring is a forecasting technique for government revenues, expenditures, and budget deficits that incorporates predictions about the behavior of people and organizations based on changes in fiscal policy, usually tax rates.
Dynamic scoring depends on models of the behavior of economic agents which predict how they would react once the tax rate or other policy change goes into effect.
The dynamic analysis is potentially more accurate than the alternative, if the econometric model correctly captures how households and firms will react to a policy changes.
This has been attacked as assumption-driven compared to static scoring which makes simpler assumptions about behavior change due to the introduction of a new policy.
(b) An estimate provided by the Joint Committee on Taxation to the Director of the Congressional Budget Office under section 201(f) of the Congressional Budget Act of 1974 for any major legislation shall, to the extent practicable, incorporate the budgetary effects of changes in economic output, employment, capital stock, and other macroeconomic variables resulting from such legislation.