Fiscal Policy Program: Latest Articles

One sidelight of President George W. Bush's recent trip to Rome for the funeral of the pope was the apparently warm interaction between Presidents Bush and Clinton. In particular, Bush praised Clinton's thinking in the area of Social Security. This praise focused the public eye on an underappreciated fact. President Clinton devoted an enormous amount of effort to the study of Social Security reform. It may well be the case that Social Security reform would have been accomplished if impeachment… more

It should come as no surprise that proposals to create individual accounts as part of Social Security reform are faltering. As the layers of promises are peeled back, it becomes increasingly clear that investment accounts are neither necessary nor sufficient to fix Social Security. Accounts will not make millionaires out of minimum-wage workers. Higher returns from investing in stocks will not work as some magic elixir that cures the challenges confronting Social Security. Accounts will not result in huge estates… more

The corporate income tax has always had enemies. Introduced in 1909 as an effort to close the country's worst budget gap since the Civil War, economists and capitalists almost immediately began to argue that it was inefficient and slowed down business. More recently, Presidents Reagan and Carter, as well as conservative economist Milton Friedman and liberal economist Lester Thurow, have all recommended that the country scrap it. In May 2001, then-Treasury Secretary Paul O'Neill called the tax… more

John Kerry not only has a message problem, he seems to have conflicting economic priorities. Kerry wants to make job creation and helping the middle class the central theme of his campaign, but he has yet to offer any bold or compelling ideas to back up the rhetoric. At the same time, he has been unable to find a way to square his broader jobs agenda with his commitment to fiscal prudence. Allow us to suggest a solution to both… more

We have become accustomed to thinking that taxes, like hemlines, can only go up or down. This isn't true. Over the centuries changes in the form of U.S. taxes have been at least as dramatic as changes in the rate of taxation.

For instance, most federal revenues now come from personal and corporate income taxes, and from the payroll taxes that fund Social Security and Medicare. But most government revenues originally came from excise taxes on luxury items such as… more