The idea that marginal tax rates and tax revenue may be inversely related is at least as old as Adam Smith's Wealth of Nations. The emergence of the "Laffer Curve" in the modern public debate on the subject has rekindled interestin this idea. The present paper uses data from the 1982 tax rate...

The Economic Recovery Tax Act of 1981 mandated the most substantial reduction in personal income tax rates since the tax cuts of 1964. The rate reductions stimulated debates about the responsiveness of taxpayers to tax rates and incentives, the magnitude of the foregone revenue, and the...

The recent proposal for tax reform developed by the Department of the Treasury suggests dramatic changes in the structure of the personal income tax. One likely side effect of the changes will be a significant adverse impact on the level of charitable contributions by individuals.This paper...

When the zero lower bound on nominal interest rates binds, monetary policy cannot provide appropriate stimulus. We show that in the standard New Keynesian model, tax policy can deliver such stimulus at no cost and in a time-consistent manner. There is no need to use inefficient policies such as...

This paper investigates the impact of changes in the level of taxation on economic activity. We use the narrative record -- presidential speeches, executive-branch documents, and Congressional reports -- to identify the size, timing, and principal motivation for all major postwar tax policy...

This paper examines the investment effects of tax subsidies for which some assets and not others are eligible. Distortionary tax subsidies encourage firms to concentrate investments in tax-favored assets profitability of investment and reducing payoffs to bondholders in the event of default....