Macroeconomic Modeling of Tax Policy: A Comparison of Current Methodologies

The macroeconomic effects of tax reform are a subject of significant discussion and controversy. In 2015, the House of Representatives adopted a new “dynamic scoring” rule requiring a point estimate within the budget window of the deficit effect due to the macroeconomic response to certain proposed tax legislation. The revenue estimates provided by the staff of the Joint Committee on Taxation (JCT) for major tax bills often play a critical role in Congressional deliberations and public discussion of those bills. The JCT has long had macroeconomic analytic capability, and in recent years, responding to Congress’ interest in macrodynamic estimates for purposes of scoring legislation, outside think tank groups — notably the Tax Policy Center and the Tax Foundation — have also developed macrodynamic estimation models. The May 2017 National Tax Association (NTA) Spring Symposium brought together the JCT with the Tax Foundation and the Tax Policy Center for a panel discussion regarding their respective macrodynamic estimating approaches. This paper reports on that discussion. Below each organization provides a general description of their macrodynamic modeling methodology and answers five questions posed by the convening authors

Ribosomal oxygenases are structurally conserved from prokaryotes to humans

2-Oxoglutarate (2OG)-dependent oxygenases have important roles in the regulation of gene expression via demethylation of N-methylated chromatin components1,2 and in the hydroxylation of transcription factors3 and splicing factor proteins4. Recently, 2OG-dependent oxygenases that catalyse hydroxylation of transfer RNA5,6,7 and ribosomal proteins8 have been shown to be important in translation relating to cellular growth, TH17-cell differentiation and translational accuracy9,10,11,12. The finding that ribosomal oxygenases (ROXs) occur in organisms ranging from prokaryotes to humans8 raises questions as to their structural and evolutionary relationships. In Escherichia coli, YcfD catalyses arginine hydroxylation in the ribosomal protein L16; in humans, MYC-induced nuclear antigen (MINA53; also known as MINA) and nucleolar protein 66 (NO66) catalyse histidine hydroxylation in the ribosomal proteins RPL27A and RPL8, respectively. The functional assignments of ROXs open therapeutic possibilities via either ROX inhibition or targeting of differentially modified ribosomes. Despite differences in the residue and protein selectivities of prokaryotic and eukaryotic ROXs, comparison of the crystal structures of E. coli YcfD and Rhodothermus marinus YcfD with those of human MINA53 and NO66 reveals highly conserved folds and novel dimerization modes defining a new structural subfamily of 2OG-dependent oxygenases. ROX structures with and without their substrates support their functional assignments as hydroxylases but not demethylases, and reveal how the subfamily has evolved to catalyse the hydroxylation of different residue side chains of ribosomal proteins. Comparison of ROX crystal structures with those of other JmjC-domain-containing hydroxylases, including the hypoxia-inducible factor asparaginyl hydroxylase FIH and histone Nε-methyl lysine demethylases, identifies branch points in 2OG-dependent oxygenase evolution and distinguishes between JmjC-containing hydroxylases and demethylases catalysing modifications of translational and transcriptional machinery. The structures reveal that new protein hydroxylation activities can evolve by changing the coordination position from which the iron-bound substrate-oxidizing species reacts. This coordination flexibility has probably contributed to the evolution of the wide range of reactions catalysed by oxygenases