National Center for Policy Analysis: History
Establishment of the Center for Tax Policy
Very few think tank studies are released by members of Congress. A 1990 pro-growth tax cut study was one of the NCPA’s first exceptions, released on Capitol Hill by more than 50 members of the House of Representatives. This was the first of many such events for the NCPA, leading to the creation of the NCPA’s Center for Tax Studies which makes policy recommendations guiding the decisions of lawmakers.
- In 1991, the NCPA and the U.S. Chamber of Commerce published "Strategy for Growth," calling for five pro-growth tax cuts: a capital gains tax cut, a back-ended (Roth) IRA, an increase in the amount seniors can earn without losing Social Security benefits, a rollback in the Social Security benefits tax and depreciation indexing. This tax package became the basis for a DeLay-Wallop bill, a Gramm-Gingrich bill and several other proposals in Congress. Eventually the package became the core of the pro-growth tax proposals in the Contract with America. By 1997, three of the proposals became law.
- The NCPA also began preparing formal forecasts concerning the economic consequences of major proposals. For example, the NCPA found that former California Gov. Jerry Brown’s 1992 flat tax proposal would stimulate the economy more than the economic proposals of two other presidential candidates: George Bush and Bill Clinton.
- In 1994, NCPA Senior Fellow Gerald Scully estimated a Laffer curve of the United States economy. Scully found that maximum economic growth occurs when the government takes no more than 23 percent of the GDP. Had taxes been this low since the 1950s, per capita income would be double today’s earnings. Furthermore, the government would have received enough revenue to fund all actual spending programs enacted over the period with no net public debt.
- Two NCPA studies in the early 21st century changed the nation’s viewpoint on taxation: Does it Pay to Work? showed that marginal tax rates exceed 50 percent at almost every income level; Women and Taxes showed that second earner spouses in two-earner families face the highest marginal tax rates in the country—sometimes in excess of 100 percent!
- President Bush’s 2003 “Jobs and Growth” tax plan drew on concepts advocated by the NCPA since its inception. The plan cut taxes by $350 billion, increased child tax credit to $1,000, lowered the tax burden for married couples and allowed smaller businesses to expense additional equipment investments.