New estimates of macroeconomic effects of tax changes

How can one use historical data to estimate the effects of tax changes on GDP? The simple idea of looking at how the two series are correlated obviously won't do, since tax revenues would necessarily rise during an economic boom as an immediate consequence of the fact that, with a given tax schedule, people would owe more taxes if they earn more income. The correlation between tax revenues and GDP would then be telling us the effect of GDP on tax revenue rather than the effect of tax rates on GDP. The common method of calculating cyclically adjusted tax revenue could correct for this, but only partially. For example...more>>