Illustrates challenges faced by economists involved in the tax policy process, with a focus on two central issues (revenue measurement and the distributional effect of proposed tax changes).

The recently completed Mirrlees Review focuses on reforming the UK tax system. It represents an unusual blend of “best practice” application of economic theory and evidence to realistic policy design; it lays out policy proposals with sufficient justification and specificity that they go...

Points to the growth of three programs (Medicare, Medicaid, and Social Security) as the source of the projected long-term U.S. fiscal imbalance. Evaluates the effect of policy changes on this imbalance, and finds that the long-run imbalance will persist and waiting to adopt policy changes will...

Following through on pledges made during his election campaign, President Bush proposed and Congress passed a substantial tax cut in 2001, the Economic Growth and Tax Relief Reconciliation Act (EGTRRA). Much has been written about the size of the tax cut, its impact on the federal budget, its...

Considers why so many questions about the economic effects of tax reforms remain unanswered, and draws implications for how economics can be used to evaluate and design changes.

This paper provides alternative measures of federal budget surpluses over 10-year and long-term horizons. Official baseline budget forecasts are based on a series of statutory requirements that may be at variance with reasonable expectation. More plausible notions of current policy toward...

This paper considers the performance of government forecasts--by the Congressional Budget Office (CBO) and the Office of Management and Budget (OMB)--from the standpoint of bias and efficiency. The results are mixed. On the one hand, their performance has not differed significantly from that of...

Discusses the distortions associated with capital gains taxation, how these would be affected by a reduction in capital gains tax rates, and other policies available to lessen such distortions.

This paper provides new estimates of the federal budget outlook over 10-year and long-term horizons under three sets of assumptions: the Congressional Budget Office baseline, which assumes no changes in current law; an extended policy scenario, in which it is assumed that future Congresses act...

States that academic economists need to focus not only on the economic merits of different policy options but on the positive economics as well.