Federal tax policy / Joseph A. Pechman.

Format:

Book

Author/Creator:

Pechman, Joseph A., 1918-1989.

Series:

Studies of government finance. Second series

Studies of government finance. Second series.

Language:

English

Subjects (All):

Fiscal policy--United States.

Fiscal policy.

United States.

Taxation--United States.

Taxation.

Physical Description:

xix, 430 pages : illustrations ; 24 cm.

Edition:

Fifth edition.

Place of Publication:

Washington, D.C. : Brookings Institution, [1987]

Summary:

This fifth edition of Federal Tax Policy, like its predecessors, is intended to explain such issues so that the interested citizen may better understand and contribute to public discussion of tax policy. This edition reflects tax developments between 1983 and 1987 and emphasizes the newer issues: comprehensive income taxation, the effects of taxation on economic incentives, inflation adjustments for income tax purposes, the relative merits of graduated income taxes and expenditure taxes, and changes in the fiscal relations between the federal and the state and local governments.

Contents:

Features of the U.S. Tax System 1

Goals of Taxation 5

2. Taxes and Economic Policy 8

Stabilization Policy 9

Fiscal Policy 9

Built-in Stabilizers 12

The High-Employment Surplus or Deficit 14

Adjusting Expenditures and Taxes to Promote Stability 20

Automatic Budget Rules 23

Monetary Policy 24

Rational Expectations 26

Policies to Promote Economic Growth 27

Achieving Full Employment and Stable Prices 28

Raising the Growth Rate 30

The Debt Burden 32

3. The Tax Legislative Process 38

Executive Preparation of a Tax Bill 41

The Bill in Congress 44

The Ways and Means Committee 45

House Approval 48

The Senate Finance Committee 49

The Senate Debate 50

The Bill in Conference 51

Presidential Action 52

Improving the Process 54

Simplifying the Tax Law 54

Representation of the Public Interest 55

Reforming the Tax Structure 57

Consideration of Overall Fiscal Policies 58

4. The Individual Income Tax 63

The Structure of the Federal Income Tax 64

Adjusted Gross Income and Taxable Income 65

Tax Rates 66

Reporting Requirements 69

Methods of Tax Payment 70

Final Tax Reconciliation 72

Possible Modification of the Current Payment System 73

Economic Effects 73

Role as Stabilizer 74

Work Incentives 76

Effect on Saving 77

Structural Problems 78

Personal Exemptions 81

The Negative Income Tax 86

Personal Deductions 91

Transfer Payments and Wage Supplements 100

The Family 102

The Aged 107

Earned Income 109

Indexing for Inflation 114

Capital Gains and Losses 116

Saving Incentives 122

State and Local Government Bond Interest 123

Income Averaging 127

Minimum Tax 128

Tax Shelters 130

Tax Simplification 131

5. The Corporation Income Tax 135

Characteristics of the Tax 137

The Tax Base 137

Tax Rates 140

Tax Payment 141

Shifting and Incidence of the Tax 141

The Shifting Mechanism 142

The Evidence 145

Economic Issues 146

Investment and Saving 147

Equity and Debt Finance 151

Resource Allocation 152

Built-in Flexibility 154

Balance of Payments 155

Structural Features 156

Capital-Consumption Allowances 157

Allowances for the Mineral Industries 164

Financial Institutions 166

Tax-Exempt Organizations 169

Corporate Acquisitions and Reorganizations 171

Foreign and Export Income 171

Inflation Accounting 173

Depreciation 174

Inventories 175

Net Financial Assets and Liabilities 176

Choice of Adjustments 177

Integration of the Corporation and Individual Income Taxes 179

The Additional Burden on Dividends 179

Methods of Integration 181

6. Consumption Taxes 190

Types of Consumption Taxes 190

Issues in Excise Taxation 192

Economic Effects of Excise Taxes 192

Equity Considerations 199

A General Consumption Tax? 201

The General Sales Tax 201

The Value-Added Tax 204

Sales or Value-Added Taxes versus Income Taxes 207

The Expenditure Tax 208

7. Payroll Taxes 214

The Development of Payroll Taxes 214

The Insurance Analogy 219

Features of Payroll Taxes 219

Regressivity 220

Built-in Flexibility 221

Effect on Prices, Employment, and Wages 223

Effect on Personal and Public Saving 225

Taxation of Benefits 226

Financing Social Security 227

The Contributory System 227

Proposals for Reform 229

Financing Unemployment Insurance 231

8. Estate and Gift Taxes 234

The Role of Wealth Transfer Taxes 234

Characteristics of the Taxes 236

The Estate Tax 237

The Gift Tax 238

The Tax Base 238

Structural Problems 240

Transfers by Husbands and Wives 240

Imperfect Unification of Estates and Gifts 243

Generation Skipping through Trusts 245

Generation Skipping through Outright Transfers 249

Charitable Contributions 250

Small Business and Farm Property 251

Other Methods of Taxing Wealth 252

Inheritance or Accessions Taxes 252

The Annual Wealth Tax 254

9. State and Local Taxes 256

The State and Local Structure 257

State Taxes 259

Local Taxes 262

State and Local Fiscal Performance, Capacity, and Effort 263

Major Issues 264

Income Taxes versus Sales Taxes 264

Deductibility 267

The Property Tax 269

Tax Coordination 278

State and Local Fiscal Relations 285

Federal Aid 289

The Plight of the Cities 295

A. Historical Summary of the Major Federal Taxes 299

B. Tax Bases of the Major Federal Taxes 338

C. Tax Expenditures 355.

Notes:

Includes index.

Includes bibliographical references.

ISBN:

0815769628 :

081576961X

OCLC:

15652389