Simulating Fundamental Tax Reform in the United States

David Altig
Authors registered in the RePEc Author Service: Jan Walliser

American Economic Review, 2001, vol. 91, issue 3, 574-595

Abstract: This paper uses a new, large-scale, dynamic life-cycle simulation model to compare the welfare and macroeconomic effects of transitions to five fundamental alternatives to the U.S. federal income tax, including a proportional consumption tax and a flat tax. The model incorporates intragenerational heterogeneity and a detailed specification of alternative tax systems. Simulation results project significant long-run increases in output for some reforms. For other reforms, namely those that seek to insulate the poor and initial older generations from adverse welfare changes, long-run output gains are modest.

JEL-codes: E62 H24 H30 (search for similar items in EconPapers)
Date: 2001
Note: DOI: 10.1257/aer.91.3.574
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Citations: View citations in EconPapers (354)

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