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Tax and spending reform for fiscal stability and economic growth

Author

Listed:
  • Joseph Antos

    (American Enterprise Institute)

  • Alan D. Viard

    (American Enterprise Institute)

  • Alex Brill

    (American Enterprise Institute)

  • Andrew G. Biggs

Abstract

Recognizing the unsustainable fiscal outlook facing the United States, the authors present a plan to constrain the growth of federal spending and reform the tax system to promote economic growth. The plan replaces the income tax system with a progressive consumption tax, eliminating the bias against savings and investment. The plan revamps Social Security to provide a flat, universal benefit that would virtually eliminate poverty in old age, making the program more effective in protecting low earners, more conducive to saving and longer work lives, and better aligned with the work and retirement conditions that will prevail in the coming decades. Additionally, the plan adopts health reforms that are intended to slow the growth of spending while maintaining access to high-quality health services, by shifting away from the defined-benefit approach that characterizes Medicare and Medicaid today to a defined-contribution philosophy. The plan also brings federal spending and revenue into closer alignment, sparing future generations from the explosive growth of federal debt.

Suggested Citation

  • Joseph Antos & Alan D. Viard & Alex Brill & Andrew G. Biggs, 2015. "Tax and spending reform for fiscal stability and economic growth," AEI Economic Perspectives, American Enterprise Institute, May.
    • Handle: RePEc:aei:journl:y:2015:id:843018
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    References listed on IDEAS

    as
    1. Congressional Budget Office, 2012. "Raising the Ages of Eligibility for Medicare and Social Security," Reports 42683, Congressional Budget Office.
    2. Congressional Budget Office, 2012. "Raising the Ages of Eligibility for Medicare and Social Security," Reports 42683, Congressional Budget Office.
    3. David Bradford, 2004. "The X Tax in the World Economy: Going Global with a Simple, Progressive Tax," Books, American Enterprise Institute, number 51639, September.
    4. Alan D. Viard & Robert Carroll, 2012. "Progressive Consumption Taxation: The X Tax Revisited," Books, American Enterprise Institute, number 10533, September.
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    Cited by:

    1. Givi Bedianashvili & Yuriy B. Ivanov & Tetiana V. Paientko, 2019. "Tax Reforms in Ukraine and Georgia: Changing Priorities," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 5(2), pages 107-128.
    2. Paientko Tetiana & Oparin Valeriy, 2020. "Reducing the Tax Burden in Ukraine: Changing Priorities," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 28(3), pages 98-126, September.

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