Mr. Gary Robbins

In a previous report (#131), we showed that the recent decline in America's saving rate is tied to the tax treatment of capital. In this report, we show that a similar relationship exists between business capital formation and the tax treatment of new investment.The results of this study have clear implications for tax policy and the tax reform debate. The evidence suggests that lowering taxes on capital may produce enough positive economic effects to offset most or all of the static revenue loss. Unfortunately, the current practice of government revenue estimators is to deny that any relationship exists between the aftertax return to capital and capital formation. Unless this practice is corrected, the outcome of the upcoming tax reform debate will produce unintended consequences and missed opportunities for the economy and the budget.

This report is the first step in a long project of making the case that in order to stimulate the economy through increased saving and investment, that United States should change its tax policy to remove the penalties on saving and investment. In ohter words, to move toward the taxation of consumption. This report is chock full of data, tables, and formulas, and the data is available in a Lotus spreadsheet on the File Download Page of this Web site (see table of contents).

In only six short years, the Social Security trust fund has lost $8.8 trillion, or three-fourths of its projected balance. This study explains what happened, and what we can do about it.

This is a 6-page analysis of the House Republican "Contract With America" proposal to reform business depreciation rules.

A 6-page analysis of the House Republican "Contract With America" proposals to expand the availability of IRAs, and to increase the unified estate tax credit.

Published in Cooperation with the Lehrman Institute.

Faulty static government forecasting methods that are biased in favor of spending and against tax cuts have contributed to out-of-control government spending and spiralling budget deficits. Dynamic scoring, which better reflects the reaction of taxpayers and businesses to changes in tax law, should be incorporated into the government forecasting process. This paper is the definitive case for dynamic scoring.

A survey of major tax bills since 1954, demonstrating that, with a few notable exceptions, the constant effort to make the tax code "fairer" by raising tax rates on capital and labor have resulted in a tax code that discourages business formation, job creation, and capital formation, thus limiting growth.

The U.S. economy is lagging in GDP growth relative to recent history. This study proposes and evaluates a package of six changes to the tax code that would increase job creation and GDP growth, and restore long-term growth prospects.

An examination of a proposed change in the tax code revising the rules for business depreciation, taking into account inflation and the time value of money. This proposal was part of the House Republican's Contract with America.

An evaluation of six proposal for capital gains tax relief, comparing them with regard to their effect on the economy.