Book contents
- Frontmatter
- Contents
- Preface
- List of contributors
- 1 Introduction
- 2 Trends in federal tax progressivity, 1980–93
- COMMENTS
- 3 The lifetime incidence of state and local taxes: measuring changes during the 1980s
- COMMENTS
- 4 Trends in income inequality: the impact of, and implications for, tax policy
- COMMENTS
- 5 The efficiency cost of increased progressivity
- COMMENTS
- 6 On the high-income Laffer curve
- COMMENTS
- 7 Tax progressivity and household portfolios: descriptive evidence from the Survey of Consumer Finances
- COMMENTS
- 8 Progressivity of capital gains taxation with optimal portfolio selection
- COMMENTS
- 9 Perceptions of fairness in the crucible of tax policy
- COMMENTS
- 10 Progressive taxation, equity, and tax design
- Index
9 - Perceptions of fairness in the crucible of tax policy
Published online by Cambridge University Press: 20 May 2010
- Frontmatter
- Contents
- Preface
- List of contributors
- 1 Introduction
- 2 Trends in federal tax progressivity, 1980–93
- COMMENTS
- 3 The lifetime incidence of state and local taxes: measuring changes during the 1980s
- COMMENTS
- 4 Trends in income inequality: the impact of, and implications for, tax policy
- COMMENTS
- 5 The efficiency cost of increased progressivity
- COMMENTS
- 6 On the high-income Laffer curve
- COMMENTS
- 7 Tax progressivity and household portfolios: descriptive evidence from the Survey of Consumer Finances
- COMMENTS
- 8 Progressivity of capital gains taxation with optimal portfolio selection
- COMMENTS
- 9 Perceptions of fairness in the crucible of tax policy
- COMMENTS
- 10 Progressive taxation, equity, and tax design
- Index
Summary
Introduction
The dramatic changes in U.S. tax laws in the 1980s naturally lead one to inquire into the forces that shape and change tax policy. Two views are often implicit in informed discussions of tax policy; at the risk of simplification, these may be termed the “idealist” and the “political” view.
According to proponents of the idealist view, major changes in tax policy are driven by deep-seated normative theories or ideologies about the tax system. The 1981 tax changes were based on incentive-based supplyside theories whose antecedents range from Andrew Mellon to Arthur Laffer to the optimal-tax theorists. The 1986 tax reform, on the other hand, traces its origins to Robert Haig, Henry Simons, Joseph Pechman, Richard Musgrave, and other “tax reformers.” A possible future major shift toward consumption-based taxation would owe its allegiance to the tradition of Irving Fisher and Martin Feldstein. Proponents of this view of the formation of tax policy adhere to the dictum of John Maynard Keynes that practical men are the slaves of “defunct economists.”
The political view of tax policy emphasizes special interests, influential committee chairmen, and the pursuit of political advantage by catering to the latest reading of volatile public opinion. Birnbaum and Murray (1987) highlight the full apparatus of lobbyists and special interests in the formation of tax policy. But the best single statement of the pursuit of political advantage through tax policy comes from maneuvers between President Bush and the Democrats in the winter of 1992.
- Type
- Chapter
- Information
- Tax Progressivity and Income Inequality , pp. 309 - 334Publisher: Cambridge University PressPrint publication year: 1994
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