As the Budget Control Act nears expiry, it is important to reflect on its effectiveness — does the BCA provide a framework for curtailing unsustainable deficits and moving to a sustainable fiscal policy? Continue Reading
Much has been said and written about the effects of the (presumed) British exit from the EU. What is clear is that uncertainty is the driving force behind the economic effects to date. So any analysis must first start by… Continue Reading
This blog presents preliminary estimates of the economic effects of a base-broadening, rate-reducing tax reform, similar to that outlined in the paper noted above, using the Tax Policy Advisers model — a model developed by John Diamond, the Baker Institute Edward A. and Hermena Hancock Kelly Fellow in Public Finance, and George Zodrow. The simulations show that such a base-broadening, rate-reducing reform would have significant positive economic effects on the U.S. economy, including increases in investment, the capital stock, employment, and real wages. Specifically, I find that the reform would, if passed immediately, increase GDP relative to the baseline by 5.0 percent over the next decade, while creating 5.9 million jobs. Continue Reading
Twenty-five years ago this week, President Ronald Reagan signed into law the Tax Reform Act of 1986, the last major effort to update the U.S. income tax system.
The legislation, also known as TRA86, lowered individual taxpayer rates by closing corporate loopholes and reflected more than two years of negotiations by Reagan, a Republican, with a Democratic-controlled House of Representatives.
“When I sign this bill into law, America will have the lowest marginal tax rates and the most modern tax code among major industrialized nations, one that encourages risk-taking, innovation and that old American spirit of enterprise,” Reagan said at the time. Continue Reading
Houston city council’s plan to create a super committee of elected officials, community leaders, union representatives and pension experts to tackle the city’s pension funding issues doesn’t go far enough, according to John W. Diamond, the Edward A. and Hermena… Continue Reading
My colleagues, Dr. Dagobert Brito and Dr. Robert Curl, recently published a column in the Houston Chronicle on “Competence, not amendment needed to fix debt” that questioned the logic of my column “A plan to move past debt status quo.” … Continue Reading
Partisan brinkmanship in Washington is putting the nation at risk, says public finance fellow John Diamond, but Congress can use this opportunity to lay the groundwork for sustainable budget policies. In a July 18, 2011, Houston Chronicle op-ed. Diamond recommends… Continue Reading