Tax Myths Debunked
E. Fruits & R. Pozdena, Tax Myths Debunked, American Legislative Exchange Council, 2013
48 Pages Posted: 12 Feb 2013
Date Written: February 6, 2013
Abstract
The U.S. economy has recently suffered its deepest and most prolonged recession since the Great Depression. The fundamental causes of the recession and the slow recovery are the result of two decades of poorly conceived housing credit and other policies and the adoption of long-ago discarded Keynesian policies. The latter policies have failed to rejuvenate the economy and have left behind a massive accumulation of national debt. This accumulation has significantly constrained the policy options of the Federal Reserve, Congress and state and local governments.
State fiscal policy reform therefore needs to include policies that will support economic growth and break with the long tradition of high levels of taxation, government spending and intervention at the state level. The states must do this alone because the federal government will be in no position to provide financial assistance.
In this setting, defenders of the status quo and advocates for the so-called “progressive” reforms of higher taxes and greater government involvement have sought to discredit legitimate and research-based state fiscal policy reforms. The purpose of this paper is to set the record straight regarding recent pro-growth reform proposals, as well as illustrate the theoretical and empirical mythology that is used to discredit reform efforts.
After first providing an introduction and background to the current challenges that states face in reforming tax and spending strategies, the study provides an analysis of reform proposals that will reduce tax system impediments to economic growth.
Numerous scholarly articles and papers are referenced throughout this report, and detailed citations are available in the report’s bibliography.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of The1986 Tax Reform Act
-
Tax Avoidance, Evasion, and Administration
By Joel B. Slemrod and Shlomo Yitzhaki
-
The Elasticity of Taxable Income: Evidence and Implications
By Jonathan Gruber and Emmanuel Saez
-
What Happens When You Tax the Rich? Evidence from Executive Compensation
-
A New Method of Estimating Risk Aversion
By Raj Chetty
-
Reported Incomes and Marginal Tax Rates, 1960-2000: Evidence and Policy Implications
-
Are "Real" Responses to Taxes Simply Income Shifting between Corporate and Personal Tax Bases?
By Roger H. Gordon and Joel B. Slemrod