In the heady days after his re-election, President Bush promised to replace the current tax system with something better. Politicians often delude themselves that reform can be summoned by proclamation. But, a wholesale transformation of the income tax system isn't about to happen quickly or...
To encourage saving for retirement, private pensions such as employer sponsored 401(k) plans or IRAs receive favorable tax treatment by the federal government. A major goal of such tax provisions is to increase personal saving. A measure of the value of these tax benefits is provided by the...
For the last several years, Congress has been on a spending spree unlike any in the nation’s history — a turnaround of about 7 percent of gross domestic product in going from surplus to deficit. In addition to size, what made this spree unique was that tax cuts, defense increases, large...
This is the eighth and final installment in a series that evaluates tax policy in the Bush Administration, covering the years 2001 to 2004. The paper summarizes our principal findings, and discusses some of the key tax and fiscal issues facing the Administration in its second term.
The American Jobs Creation Act of 2004 includes a major attempt to reform the tax rules for deferred compensation arrangements covering corporate managers. This paper examines the tax policy and corporate-governance policy objectives of the reform effort, explores the shortcomings of the...
This paper examines links between the Bush Administration's tax cuts and the goal of "starving the beast"--that is, holding down government spending. It is at best unclear whether tax cuts are effective in restraining spending. The data appear more consistent with the view that once fiscal...
Bush Administration tax policy has sometimes been defended as a piecemeal approach to fundamental reform. Consistent with fundamental reform, the tax cuts reduced marginal capital income tax rates and flattened rates. But the similarities end there. A well designed consumption tax would (a) be...
This paper examines the effects of recent tax cuts as a short-term economic stimulus. The passage of the tax cuts was well-timed to offset economic downturns, but several elements of the structure of the tax cuts were poorly designed to provide short-term stimulus. For example, the tax cuts were...
Tax policy can raise growth in the long run increasing the level and improving the allocation of labor and capital inputs. The net effect of the recent tax cuts on growth is theoretically uncertain and is the net effect of (a) the generally positive effects induced by lower marginal tax rates, (...
Sisyphus Had it Easy
In the heady days after his re-election, President Bush promised to replace the current tax system with something better. Politicians often delude themselves that reform can be summoned by proclamation. But, a wholesale transformation of the income tax system isn't about to happen quickly or...
Retirement Saving Incentives and Personal Saving
To encourage saving for retirement, private pensions such as employer sponsored 401(k) plans or IRAs receive favorable tax treatment by the federal government. A major goal of such tax provisions is to increase personal saving. A measure of the value of these tax benefits is provided by the...
Tough Choices, Opportunity, or Both?
For the last several years, Congress has been on a spending spree unlike any in the nation’s history — a turnaround of about 7 percent of gross domestic product in going from surplus to deficit. In addition to size, what made this spree unique was that tax cuts, defense increases, large...
Exempting Dividends, Interest, and Capital Gains From Taxation
This article uses the TPC tax model to examine the direct effect of exempting all dividends, interest, and capital gains from income taxation.
Bush Administration Tax Policy: Summary and Outlook
This is the eighth and final installment in a series that evaluates tax policy in the Bush Administration, covering the years 2001 to 2004. The paper summarizes our principal findings, and discusses some of the key tax and fiscal issues facing the Administration in its second term.
Executive Compensation Reform and the Limits of Tax Policy
The American Jobs Creation Act of 2004 includes a major attempt to reform the tax rules for deferred compensation arrangements covering corporate managers. This paper examines the tax policy and corporate-governance policy objectives of the reform effort, explores the shortcomings of the...
Bush Administration Tax Policy: Starving the Beast
This paper examines links between the Bush Administration's tax cuts and the goal of "starving the beast"--that is, holding down government spending. It is at best unclear whether tax cuts are effective in restraining spending. The data appear more consistent with the view that once fiscal...
Bush Administration Tax Policy: Down Payment on Tax Reform?
Bush Administration tax policy has sometimes been defended as a piecemeal approach to fundamental reform. Consistent with fundamental reform, the tax cuts reduced marginal capital income tax rates and flattened rates. But the similarities end there. A well designed consumption tax would (a) be...
Bush Administration Tax Policy: Short-Term Stimulus
This paper examines the effects of recent tax cuts as a short-term economic stimulus. The passage of the tax cuts was well-timed to offset economic downturns, but several elements of the structure of the tax cuts were poorly designed to provide short-term stimulus. For example, the tax cuts were...
Bush Administration Tax Policy
Tax policy can raise growth in the long run increasing the level and improving the allocation of labor and capital inputs. The net effect of the recent tax cuts on growth is theoretically uncertain and is the net effect of (a) the generally positive effects induced by lower marginal tax rates, (...