Reassessing the Fiscal Gap: The Role of Tax-Deferred Saving
18 Pages Posted: 2 Oct 2003
Several recent studies show that the United States faces a large fiscal gap. Boskin (2003) suggests that revenues from tax-deferred saving accounts are omitted from these figures and are large relative to the fiscal gap. We find that Boskin's projections have a tiny impact on the fiscal outlook because almost all of the relevant revenue is already incorporated into the projections that generate sizable fiscal gaps. Also, although the primary focus of Boskin's analysis is the overall effect on the budget from retirement accounts - not how much is already included in the budget projections - we also find that his estimated overall budgetary effect is substantially overstated.
Keywords: fiscal gap, Boskin, budget
JEL Classification: H0
Suggested Citation: Suggested Citation