The U.S. Congress is evaluating several proposals to reform the federal income tax system. Proponents of tax reform want to simplify tax preparation and stimulate economic growth by increasing the incentives for taxpayers to work, save, and invest. While the primary objective of tax reform is a...

A comparison of a simple two-bracket income tax code with an approximation to traditional structures that entail steeply rising marginal tax rates, showing that the simpler rate structures are not necessarily more efficient than alternatives with many, highly progressive brackets.

The development of a real business cycle model in which government fiscal variables such as tax rates and public expenditures are endogenous. The authors characterize the "optimal" behavior of these policy variables over the business cycle and relate this behavior to movements in private-sector...

An argument that raising federal revenues through suspending indexation of the personal income-tax code is inefficient in that it is inferior to direct increases in marginal tax rates.

Policymakers devote a great deal of attention to short-run fluctuations in the labor market. Central banks monitor indicators of labor market tightness in the conduct of monetary policy due to the potential implications for inflation. And fiscal authorities are concerned with the budget...

Proposals for fundamental reform of the federal tax code are receiving increased attention in the business press and among economic analysts and policymakers. President Bush has identified tax reform as a top priority, calling for a tax system that is “pro-growth, easy to understand, and fair...

The volatility of financial markets in recent years has led to increased concern. As trading of financial assets on organized exchanges and over-the-counter markets has grown, events such as the 1987 stock market crash and the 1992 Exchange Rate Mechanism crisis in Europe have raised fundamental...

The federal tax liabilities of different income groups change constantly in response to new tax laws and shifting economic circumstances. For example, in recent years, Congress has lowered individual income tax rates, increased child and dependent care credits, and reduced taxes on dividends and...