Tax projections and the budget: lessons from the 1980's

Article Abstract:

US economists have turned to tax reform in the 1980s and 1990s in an attempt to explain the country's fiscal crisis. Particular focus has been given to the disincentive effects of marginal tax rate increases and its impact on revenue increase, which has been overestimated. Such systematic overestimation of tax reform gains and losses should have yielded a negative relationship between forecast errors and revenue estimates. Inadequate consideration of taxpayer behavior is projected as a vital factor for the excess estimation.

Forecasts and trends, United States economic conditions, Monetary policy, Revenue

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The response of household consumption to income tax refunds

Article Abstract:

A survey was conducted on the income tax refunds and consumers' expenditures for the years 1980 to 1991 using data from the IRS and the Consumers Expenditure Survey (CEX). Findings showed that consumption increased by 35 to 60 percent of the total refunds. Also, increases in nondurable consumption like food, household operations, services and rentals, transportation services, personal services and entertainment services were observed.

Economic aspects, Consumption (Economics), Tax refunds

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Developing policy analysis of fundamental tax reform

Article Abstract:

The Joint Committee on Taxation (JCT) is responsible for evaluating the changes in revenue that arise from tax reform proposals. In early 1996, JCT started a modeling project which involved nine simulations of the impact of generic tax restructuring proposals. One of the project's objectives is to review the timing and quality of macroeconomic effects information to determine its importance in policy and budget debates.

Powers and duties, United States. Congress. Joint Committee on Taxation

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