Thinking through the Tax Options

This paper evaluates the tax proposals put forth by the Bush Administration, the House of Representatives, and the Senate Finance Committee, with respect to their impact on revenues, short-term stimulus, long-term growth and distribution of tax burdens and after-tax income. Particular attention is given to issues raised by accelerating the 2001 tax cuts, and the alternative dividend and capital gains tax cut proposals. We conclude with discussion of alternative policies that would be more efficient and equitable than those currently on the table.