WASHINGTON, D.C., April 12, 2004The Reagan tax cuts did not cause the deficits of the 1980s. The George H.W. Bush tax increases and the Clinton tax increases did not bring about the deficit reductions of the 1990s. The George W. Bush tax cuts did not trigger the deficits of the 2000s. While these actions all had important roles, broader factors such as entitlement spending, economic up- and downturns, and enforcement (or not) of budget rules should get top billing, says C. Eugene Steuerle in his new book, Contemporary U.S. Tax Policy, to be released May 3 by the Urban Institute Press.
In Contemporary U.S. Tax Policy, Steuerle, a senior fellow at the nonpartisan Urban Institute and codirector of the Urban-Brookings Tax Policy Center, dispels these and other myths as he presents a thorough history of modern federal tax policymaking. His chronicle of the last 25-plus years, told from the vantage point of a former U.S. treasury official under four presidents, enables policymakers, academics, and laypeople to reflect broadly on the success or failure of numerous policies and their advocates and detractors. It also shows how competing theories and tactics have combined to get tax policy where it is today.
"This is the tale of an ever whirling and contradictory tax policy, where both left and right agree mainly on one thing: using the tax code to try to change the behavior of people and control the direction of government," says Steuerle, one of the most respected interpreters of recent tax history and a former deputy assistant secretary of the treasury for tax analysis.
In Contemporary U.S. Tax Policy, Steuerle makes clear how
- tax breaks now account for one-quarter to one-third of the benefits and subsidies granted to the public.
- taxes have become a primary instrument for dealing with growth and recession, changing the distribution of income, and affecting the behavior of farmers, research firms, energy suppliers, the poor, and hundreds of other groups.
- tax breaks for homeownership provide subsidies greater than the entire budget of the U.S. Department of Housing and Urban Development. Similarly, in 2003 the federal government spent $35.5 billion on families through the Earned Income Tax Credit and $27.3 billion through the child tax credit, topping the $26 billion allocated to welfare programs.
- compared with most of the nation's history, only since the 1980s have deficit reduction and surplus spending largely defined fiscal policy. During this period, Congress has paid limited attention to the underlying purposes of taxes, which presumably support the activities of government agencies, or, for that matter, of expenditure programs aimed at improving the well-being of citizens.
"In a tax policy environment increasingly characterized by reductionist sound bites and misleading claims, Gene Steuerle stands out as a nonpartisan, wise, and unflinching truth-teller. Everyone trying to understand the present dilemmas of tax policymakinghow we got here and how to change for the betterneeds his timely and penetrating analysis," says former White House, Treasury, and Social Security official Stanford G. Ross. "Hopefully, responsible policymakers and concerned citizens alike will pay heed to this brilliant and compelling book that attempts no less than to help restore fiscal sanity to a deeply troubled nation."
Contemporary U.S. Tax Policy, by C. Eugene Steuerle, will be available May 3 from the Urban Institute Press (6" x 9", 336 pages, ISBN 0-87766-720-9, $24.00). Order online at www.uipress.org or call 202-261-5687 or toll-free 1-877-847-7377.
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