The alternative minimum tax (AMT) is a complex, unfair, and inefficient shadow tax system that threatens to affect 32 million taxpayers by 2010, many of them solidly middle class. Under current law, repealing the AMT without offsets would cost more than $850 billion through 2017. This paper...

Under traditional formulations, lower capital income tax rates reduce the user cost of capital and stimulate investment. The traditional approach, however, implicitly or explicitly considers a revenue–neutral reduction in capital income taxation. We extend the traditional approach by...

In this paper, we evaluate and critique ten principal claims made in recent debates on the estate tax, distinguishing five types of statements: facts, rhetoric, value judgments, economic reasoning, and informed speculation. Economics cannot fully resolve the debate because economic knowledge is...

Presents an overview of the U.K. tax system and compares and contrasts it with the U.S. system. Identifies areas in which the two corporate and income tax systems converge and diverge, and argues that the U.S. might take cues on simplification from the British.

The effects of fiscal policy on the economy have received substantial attention in academic and policy circles. We review this literature in light of recent policy debates and new research and obtain three results. First, other things equal, deficits reduce national saving and future national...

A study of how tax changes in TRA '86 (consumer debt interest and IRA deductions) affected household saving behavior shows that household assets and debt were reallocated but that there was little change in the real level of economic activity.

This paper examines the required tax rate in a national retail sales tax (NRST). I show that recent proposals, such as one to replace virtually all federal revenues with a 23 percent tax-inclusive NRST, are based on assumptions that real government spending would decline by $480 billion per year...

We examine workers' disposition of pre-retirement lump-sum distributions, using policy changes in 1986 and 1992 as natural experiments. We find that higher taxes on cash-outs increase rollovers, consistent with both rational and behavioral motives. Several results, however, only make sense in a...

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...