SECTION 1: INTRODUCTION AND SUMMARY Changes in tax policy can influence economic incentives for households to work and save and for businesses to invest. Subsequent changes in employment, investment, and incomes can affect federal tax revenues. Dynamic analyses capturing such interactions between taxes and the economy are facilitated by integrating macroeconomic…

The President's budget for fiscal year 2007 in­cluded a number of proposals to extend expiring tax provisions. The most significant involved ex­tending the lower marginal rates on ordinary in­come enacted under the 2001 Economic Growth and Tax Relief Reconciliation Act (EGTRRA) and the preferential rates on individual net capital gains realizations and dividend…

The recent publication of "A Dynamic Analysis of Permanent Extension of the President's Tax Relief"[1] marks an important and informative de­parture for the Office of Tax Analysis (OTA) in the U.S. Department of the Treasury. It is the OTA's first public attempt to do a dynamic analysis of a major legislative initiative-the President's proposal to make permanent…

Social Security's looming financial crisis has received much attention over the past few months. However, Medicare, the other major program intended to ensure the well-being of older Americans, represents an equal if not greater threat to the long-term fiscal health of the federal government. The numbers speak for themselves. Providing promised Medicare…

Tables included in this report Table 1: The Economic Effects of the Katrina Emergency Tax Relief Act of 2005   Introduction Hurricane Katrina has dealt a serious blow to the Gulf Coast and New Orleans. Initial estimates from state and local authorities suggested that losses of human life could approach or even exceed levels last seen in the wake…

The Social Security system is facing an immense financial crisis.[1] In 12 years, it will begin taking in less money than it needs to pay the benefits cur­rently promised to program participants.[2] As a result, starting in 2017, Congress will be forced either to raise taxes or to borrow substantial sums to maintain benefit payments from the Old-Age and…