The taxation of financial services used by households has been a stumbling block in designing consumption taxes. We present a theoretical case for exempting from tax investment services, loan services, and insurance services. These services are not consumption items. Instead, they represent the...

In part because of concerns that the tax depreciation system may be dated and may not properly measure income, Congress directed that the Treasury study the current tax depreciation system. This paper is derived from the staff work for the Treasury Study. The paper first discusses the rationale...

Briefly summarizes the Treasury Department's report, Integration of the Individual and Corporate Tax Systems: Taxing Business Income Once. Presents an overview of the Treasury Department's analysis of the economic benefits, distributional consequences, and revenue effects of the integration...

Reducing the double tax on corporate income has an ambiguous effect on marginal effective tax rates. It depends on the specifics of the policy, the extent of debt finance, whether one adopts the new or the old view of dividend taxes, the identity of the marginal investor, the importance of...

Uses a general equilibrium model capable of second-best analysis to investigate the net effects on efficiency of each of these changes in capital income taxation. Emphasizes that recent tax policy decisions were influenced by revenue considerations, distributional effects, and noneconomic...