Final answer:
The claim that dynamic forecasting ignores taxpayer response to tax changes when estimating tax revenues is false. Dynamic forecasting models consider how changes in tax policy might alter taxpayer behavior and the subsequent effects on tax revenues.
Step-by-step explanation:
The statement that dynamic forecasting does not take into consideration taxpayers' responses to a tax change when estimating tax revenues is false. Dynamic forecasting models do attempt to account for the ways in which taxpayers might alter their behavior in response to changes in tax policy.
For instance, if the government increases income taxes, some taxpayers might decide to work less or invest less, which could potentially lead to less tax revenue than expected if these behavioral changes are not accounted for in the forecasts.