The Structure of the Tax System versus the Level of Taxation: An Evaluation of the 1986 Act
In this paper, I assess the 1986 Tax Reform Act relative to the tax system that might have evolved over the several years following 1986 had that particular tax reform not been enacted. Had tax reform not been enacted, I believe that the pattern of steady tax increases, particularly corporate tax increases and tax increases on high-income individuals such as occurred in the 1982 and 1984 tax acts would have continued. I also believe that the 1986 Tax Reform Act introduced an income tax system that will be quite stable; broad changes, in particular changes that raise a large amount of income tax revenues, are unlikely for many years. So I am comparing the tax structure of the 1986 Tax Reform Act to a system that, in part, has an inferior structure, but that provides more revenues. Since I believe that the most important tax policy goal in 1986 and later should have been to raise revenues, not to revise the structure of the tax system, I believe that the 1986 Tax Reform Act was harmful. Tax reform not only did not raise revenues, it has made it more difficult to raise revenues in the future, without providing significant offsetting benefits.
Volume (Year): 6 (1992)
Issue (Month): 1 (Winter)
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Goulder, Lawrence H. & Thalmann, Philippe, 1993.
"Approaches to efficient capital taxation : Leveling the playing field vs. living by the golden rule,"
Journal of Public Economics,
Elsevier, vol. 50(2), pages 169-196, February.
- Lawrence H. Goulder & Philippe Thalmann, 1990. "Approaches to Efficient Capital Taxation: Leveling the Playing Field vs.Living by the Golden Rule," NBER Working Papers 3559, National Bureau of Economic Research, Inc.
- Musgrave, Richard A, 1987. "Short of Euphoria," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 59-71, Summer.
- Pechman, Joseph A, 1987. "Tax Reform: Theory and Practice," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 11-28, Summer.
- Gravelle, Jane G., 1989. "Differential Taxation of Capital Income: Another Look at the 1986 Tax Reform Act," National Tax Journal, National Tax Association, vol. 42(4), pages 441-63, December.
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