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

  • Tracy Foertsch
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    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

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    Paper provided by Congressional Budget Office in its series Working Papers with number 15914.

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    Date of creation: 03 Aug 2004
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    Handle: RePEc:cbo:wpaper:15914
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    7. Ralph C. Bryant & Long Zhang, 1996. "Alternative Specifications of Intertemporal Fiscal Policy in a Small Theoretical Model," Discussion Papers 124, Brookings Institution International Economics.
    8. Zeldes, Stephen P, 1989. "Consumption and Liquidity Constraints: An Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 305-46, April.
    9. ABDELKHALEK, Touhami & DUFOUR, Jean-Marie, 1997. "Statistical Inference for Computable General Equilibrium Models with Application to a Model of the Moroccan Economy," Cahiers de recherche 9713, Universite de Montreal, Departement de sciences economiques.
    10. Alan J. Auerbach, 2002. "The Bush Tax Cut and National Saving," NBER Working Papers 9012, National Bureau of Economic Research, Inc.
    11. Cardia, Emanuela & Kozhaya, Norma & Ruge-Murcia, Francisco J, 2003. " Distortionary Taxation and Labor Supply," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(3), pages 350-73, June.
    12. 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.
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