Aldona Robbins

The solution to looming Social Security shortfalls is increased economic growth. Personal retirement accounts, owned by workers and invested in real assets, would prefund benefits and could provide new saving and investment critical to economic growth, provided that tax reform makes saving and investment in the U.S. more attractive. Thus the path to Social Security reform is through tax reform.

Which changes in tax policy will have the strongest economic benefit per revenue dollar? Reducing tax rates on capital, such as cutting the capital gains tax rate or shortening depreciation lives, would have the biggest economic payoff. Repealing the alternative minimum tax (AMT) would also be potent, though other proposals such as payroll tax cuts would have much less “bang for the buck.”

Meaningful tax reform requires a better understanding of how taxes interact with the economy. Whether its called an income tax, a payroll tax, a sales tax, a consumption tax, a business tax or a property tax, all taxes are paid out of the income people earn with their labor and capital. The current tax code needlessly hamstrings the economy because marginal tax rates exceed average tax rates. The method of accounting presented here offers a starting point to assess how well proposals for tax reform measure up to the current system and to each other.

At stake in this election is, among other things, the fate of almost $4.6 trillion in federal budget surpluses that the government expects to collect over the next ten years.

This Issue Brief compares the tax and spending plans of Al Gore and George Bush, and provides both static and dynamic forecasting of the economic effects of the candidates' proposals.

For over two years, the federal government has been pursuing antitrust action against Microsoft. Much heated debate has surrounded the case, most of it revolving around legal issues. But the broader ramifications for risk assessment, investor confidence and the general economy have been largely ignored.

The cloud hanging over Microsoft has already done serious damage to the economy. This IPI Issue Brief attempts to quantify the extent of the economic damage already done to the economy by the government's action against Microsoft.

IPI's quarterly review and commentary of economic data, this issue covering the 4th quarter of 1999. This issue focuses on comparing the current and now-longest economic expansion in history with the second-longest--the 1960s. The current recovery is compared with the 1960s by a number of criteria. The conclusion is that the current recovery, while longer, has still not packed the punch of the recovery of the 1960s. And the current tax burden, much higher than that of the 1960s, is one factor that could potentially sink this current economic expansion.

Economic analysis and commentary based on data from third quarter of 1999. Budget surpluses have again far exceeded the projections of government forecasters, and again, the federal government has failed to return even a portion of these excess taxes to the private sector, where productivity takes place. This issue also discusses revisions to the National Income and Product Accounts (NIPA) that reclassify computer equipment and government pensions.

A discussion of all the major elements of the bill, static and dynamic revenue estimates, an estimate of the economic effects of the bill, and a "bang for the buck" analysis of the major provisions.