A Comparative Modeling of Tax Reform before and after the Legislative Process

This research modeled the extent to which the normative goals of equity and efficiency are embodied in three seminal tax reform proposals (Bradley-Gephardt, Kemp-Kasten, and the Treasury Department proposals) relative to the extant regime. The Tax Reform Act of 1986 (TRA86) is also modeled in the sa...

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Bibliographic Details
Published in:Policy sciences 1990-05, Vol.23 (2), p.133-161
Main Authors: Darryl L. Craig, Enis, Charles R.
Format: Article
Language:English
Subjects:
Adjusted gross income
Adusted gross income
Comparative Study
Earned income tax credit
Income taxes
Itemized deductions
Legislation
Legislative process
MODELING, MODELS
Modelling
Proportional taxes
Reform
Tax exemptions
Tax legislation
Tax liabilities
Tax reform
Taxation
UNITED STATES, 1945 TO PRESENT
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Summary:This research modeled the extent to which the normative goals of equity and efficiency are embodied in three seminal tax reform proposals (Bradley-Gephardt, Kemp-Kasten, and the Treasury Department proposals) relative to the extant regime. The Tax Reform Act of 1986 (TRA86) is also modeled in the same manner. The objective of this study is to compare the equity and efficiency of the initial proposals with that of the final tax reform law. This before and after analysis is designed to ascertain the degree to which the legislative process underminded the normative goals of the tax reform movement. The National Tax Model was applied to model each regime and to measure the distributional and redistributional effects on tax burdern and wage efficiency costs associated with each system across ten income classes. The reform models, including TRA86, are shown as superior to the pre-reform system with respect to the normative criteria. The legislative process did not substantially compromise the goals as reflected in the seminal reform proposals in the development of a more politically acceptable tax reform law. This exercise demonstrates that it is possible for sound legislation to survive a political process that frequently permits the sacrificing of normative goals in favor of special interests.
ISSN:0032-2687
1573-0891
DOI:10.1007/BF00175598