Options for Reforming America’s Tax Code

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Options for Reforming America’s Tax Code
New Book Reveals the Economic Costs and Benefits of Nearly 100 Tax Reform Options

Washington, DC (June 6, 2016)—There is a consensus among Americans that our tax code is overly complex, inefficient, and uncompetitive. It has been three decades since Congress passed a major tax reform plan, and many policymakers have set their sights on 2017 as an opportunity to enact comprehensive reform once again.

However, because comprehensive reform plans contain many tradeoffs and moving parts, coming up with an economically sound plan that garners bipartisan support is easier said than done. For the last 30 years, lawmakers and voters have been unsure about the effects of each separate tax change on federal revenue and economic growth. This uncertainty has led to many poorly structured, complex, and burdensome policies.

Today, the nonpartisan Tax Foundation released a new book that will help alleviate this uncertainty. Options for Reforming America’s Tax Code reveals how nearly 100 commonly proposed tax changes would impact federal revenue, jobs, tax burdens, and economic growth. These analyses were achieved using the same economic model that the Tax Foundation used to calculate the impact of each presidential candidate’s tax reform plans.

"During our experience with scoring the candidates, we learned that most lawmakers and their staff don’t have a full understanding of the mechanics of tax reform, the tradeoffs that must be made, and how different tax policies affect the economy," said Tax Foundation President Scott Hodge. "This book provides policymakers with a full, three-dimensional view of the effects of each policy change. It explains the mechanics of tax reform, the dos and the don’ts."

For journalists, the book serves as a reference tool to help them critically analyze various tax policies as they are proposed and debated. It highlights the tradeoffs that lawmakers must make while developing reform plans, and enables journalists to fact-check the claims that lawmakers make about their policy proposals.

The options in this book are not necessarily the Tax Foundation’s favored policies. In fact, none of the listed policies would be an unequivocally good or an unambiguously bad change to the tax code. Each of the options in this book comes with tradeoffs.

"Each tax policy impacts the economy in unique ways, and people need to understand why. We want to break down misconceptions, and explain that not all cuts pay for themselves and not all hikes raise the revenue people think they will," added Tax Foundation Director of Federal Projects Kyle Pomerleau. "If tax reform is going to happen in 2017, it’s important that economic growth is a focus, and that it be based on economic research, not opinion. This book offers the foundation for that conversation."

Media Contact:
Richard Borean
Communications Director, Tax Foundation
[email protected]