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Macroeconomic Impacts of Stylized Tax Cuts in an Intertemporal Computable General Equilibrium Model: Technical Paper 2004-11

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  • Tracy Foertsch

Abstract

What are the consequences of stylized cuts in federal personal income tax rates when applying alternative options for financing changes in fiscal policy? This analysis uses an intertemporal computable general equilibrium (CGE) model, with the Ramsey optimal-growth framework at its core, to explore the answer to this question. One such financing option pays for cuts in marginal income tax rates by adjusting government spending, the other by adjusting future taxes. Both equate a primary deficit with net government interest payments, so that the ratio of government debt to gross domestic product

Suggested Citation

  • Tracy Foertsch, 2004. "Macroeconomic Impacts of Stylized Tax Cuts in an Intertemporal Computable General Equilibrium Model: Technical Paper 2004-11," Working Papers 15914, Congressional Budget Office.
  • Handle: RePEc:cbo:wpaper:15914
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    File URL: https://www.cbo.gov/sites/default/files/108th-congress-2003-2004/workingpaper/2004-11_0.pdf
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    Cited by:

    1. Ross Guest & Anthony Makin, 2013. "Special Issue. Guest Editor: Zhihao Yu," Review of Development Economics, Wiley Blackwell, vol. 17(3), pages 609-626, August.

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