Publications -- Taxes

Nov 28, 2005

BA #538 – Grading the President's Tax Reform Panel's Plan

The President's Advisory Panel on Federal Tax Reform was guided by two outstanding economists, Edward Lazear and James Poterba, and an equally impressive former IRS commissioner, Charles Rossotti. They deserve great credit for recommending critical improvements to our tax system. The list includes eliminating the Alternative Minimum Tax (AMT), limiting mortgage and health insurance tax subsidies, eliminating the deductibility of state and local taxes, rationalizing deductions, exemptions, tax credits and retirement account options, and reducing the taxation of saving. If these reforms are implemented with transition rules that don't give away the store, our tax system will be more efficient and, in many ways, more equitable.

Nov 01, 2005

BA #537 – The Flat Tax: Improving on a Good Idea

Steve Forbes has done a commendable job spelling out why America's tax system must be simplified. Scrap the mind-numbingly complex, loophole-filled, savings-averse code, advises the editor-in-chief of Forbes magazine, in favor of one elegant, clear rate. A flat-rate income tax is what America needs.

Sep 29, 2005

ST #275 – Tax and Social Security Reform: Thinking Outside the Box

This study examines the effects of fundamental tax reform as well as combining tax reform with fundamental Social Security reform.

Sep 15, 2005

BA #526 – The Bicoastal Housing Bubble

Speculative "bubbles" can appear in various sectors of the economy when the Federal Reserve eases monetary policy by lowering interest rates. Generally speaking, when the Federal Reserve tightens monetary policy, the sectors of the economy that went up the most during the easing phase will fall the hardest as the bubble bursts. For instance, stocks went up the most from 1995 to 1998, when the Federal Reserve eased the money supply; stocks fell the most after the Federal Reserve tightened the money supply in 1999 and 2000.

Oct 08, 2004

BA #487 – Kerry Tax Plan: “Them” versus “Us”

A key element of the John Kerry-John Edwards campaign is an us-versus-them theme - where "us" are the poor and middle class and "them" are the greedy rich -famously characterized by Edwards as "Two Americas." The Democrats' message clearly implies that the rest of us would somehow be better off if the rich were worse off.

Aug 27, 2004

BA #483 – Benefits of the Bush Dividend Tax Cut

One of America's largest publicly owned corporations recently announced the biggest stock dividend payment in history: some $37 billion. Tens of thousands of workers and retirees will benefit from Microsoft's decision to distribute some of its profits to shareholders, as well as millions of 401(k) participants whose mutual funds invest in high-tech stocks. In the past year, other companies have paid dividends for the first time, including Target, Bank of America and Proctor & Gamble. Previously, these companies reinvested profits themselves, and shareholders only realized a gain when they sold their stocks.

Jun 21, 2004

BA #477 – Bush Savings Incentives

In the 2004 Budget, President Bush proposed to simplify and expand saving incentives. Instead of choosing from among a bewildering array of narrowly focused accounts, individuals would be able to save much larger amounts in a Lifetime Savings Account usable for any purpose and a Retirement Savings Account designed for retirement. His proposals will stimulate broader debates over tax reform and Social Security reform.

Oct 23, 2003

BA #462 – Taxing Forests to Death

Proponents of the estate tax claim it affects only the very rich. However, forest owners, many of whom are cash-poor, are more likely to incur the estate tax than the general population. Suburban growth has caused timber prices to rise; thus substantial increases in the value of forest acreage are not unusual. This makes it difficult for forest owners to avoid the estate tax and ensure their acreage remains intact for their heirs.

Oct 16, 2003

BA #461 – Prescription Drug Means Testing = Higher Marginal Tax Rates

The Medicare prescription drug benefit plans that passed the House (H.R.1) and the Senate (S.1) require modest premiums and copayments that will cover only a fraction of the total cost of the benefits seniors will receive.

Sep 03, 2003

BA #452 – The Flat Tax in Russia and the New Europe

On January 1, 2001, a 13 percent flat tax on personal income took effect in Russia. It replaced a three-tiered system with a 30 percent top rate on taxable income exceeding $5,000. The old system was complicated, and because of the high rates evasion was widespread. It also produced little revenue. The new flat tax has achieved greater compliance due to its simplicity and low rate. It is producing far more revenue than the former system.