A political-economic theory of fiscal policy is presented in which tax policy preferences are derived from a conflict of interest between individuals of different ages. Policy formation is fully rational in that an individual's beliefs regarding future policies are consistent with...

Scholars and courts recognize that the federal government uses its broad spending power to enlist states in achieving federal goals, thereby expanding the federal government’s reach beyond the areas enumerated for it in the Constitution. Similarly, the federal government can achieve similar...

This testimony makes three main points. First, income volatility, especially when it involves income declines, imposes significant hardships on American families. It heightens stress about finances and may increase household living expenses. These hardships are most pronounced for middle-and...

The federal government supports the provision of employee benefits through preferential tax treatment in the Internal Revenue Code. The Congressional Budget Act of 1974 (P.L. 93-344) requires that a list of “tax expenditures” (federal tax revenue forgone due to preferential provisions) be...

In this article we present an endogenous growth model with productive public investment in infrastructure capital. Further, we suppose that the government pays lump-sum transfers to the household and subsidizes private investment. First, we demonstrate that there exists a unique balanced growth...

We explore the welfare consequences of different taxation schemes in an economy where agents are debt-constrained. If agents default on their debt, they are banned from future credit markets, but retain their private endowments which are subject to income taxation. A change in the tax system...

Congress currently is considering changes in the capital gains tax, including reducing the rate, indexing the rate to inflation, or some combination of reduction and indexing. These changes have been advocated on the grounds that a cut in the rate will stimulate investment and economic growth....

This note provides a chronology of major tax events that involved changes in federal taxes on individual and corporate income from 1948 to 2006. For each event, the note provides background and policy motivation, major provisions, legislative timeline, and estimated revenue changes. As most tax...

It comes as no surprise to any observant person in this country that there is a wide disparity in our federal income tax treatment of persons who have differing incomes and financial resources. But while much has been written on tax law complexity and inefficiency, little or nothing has been...

The federal tax system, and the income tax in particular, is often held out as a key — perhaps the key tool — for combatting income inequality. Especially given the rapid rise in inequality seen over the last 30 years, it is natural to look to the tax code and ask what can be done in...