About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 J. D. Foster, Tax Rate Reduction in 1998 1 (1998)

handle is hein.taxfoundation/taxfaapc0001 and id is 1 raw text is: TAXW FOUNDATION February 1998 Tax Rate Reduction in 1998 House Ways & Means Committee Testimony ByJ.D. Foster, Ph.D. Mr. Chairman, Mr. Rangel, Members of the Executive Director and Committee, it is with great pleasure that I Chief Economist appear before this Committee to testify to the Tax Foundation importance of focusing on tax rates as the centerpiece of any tax reduction program in 1998. I am the Executive Director and Chief Economist of the Tax Foundation. The Tax Foundation is a 60-year old non-profit, non- partisan research institution. Our mission is a simple one: To provide accurate and timely information on matters of federal, state, and local fiscal policy so that policymakers may Whatever distortions exist in the federal income tax... they are given greater effect the higher are the marginal tax rates to which taxpayers are subjected. Conversely, reducing tax rates reduces virtually all the distortions created by the tax code that rob the economy of vitality and rob the American people of greater opportunity and prosperity. make better policy. Mr. Chairman, we have good reason today to discuss tax reduction. We have an economy that is yielding tax revenues far in excess of official expectations of only a few months ago. This enormous revenue stream has created the possibility of budget surpluses in the near or very near future. While the caution previously urged by White House officials and others against a change in policy predicated on surpluses is well-taken, it is perfectly appropriate for this Committee to consider what actions it might want to take should a surplus arrive earlier than expected. Further, as this happy prospect of surpluses is the product of extraordinary growth in tax receipts, there is a certain simple logic to using the surpluses for tax relief. Another reason to consider tax relief is simply that taxes are now at their highest levels in our nation's history. Last year, Tax Freedom Day arrived on May 9, the latest day ever. Tax Freedom Day is a simple representation of the total federal, state, and local tax burden. If all of the average taxpayer s income goes to pay his taxes beginning on January 1st, then Tax Freedom Day is the day his annual fiscal debt to society is marked Paid In Full. Tax Freedom Day 1998 is almost certain to fall even later in the calendar. It's also important to remember that this increased tax burden is occurring despite last year's historic tax cut. Why is that? Because last year's tax cuts were slight indeed compared to the revenues produced by a strong economy. Which Taxes to Cut There are, therefore, very good reasons to consider tax reductions at this time. In establishing a tax cut program, I believe the Committee should take a couple pages from the tax reform debates. The number one tax policy lesson from these debates is the great imperative to get the tax base right. Economic distortions due to taxation are minimized

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most