Macroeconomic Effects of Social Security and Tax Reform in the United States

Tamim Bayoumi, Dennis Botman and Manmohan Kumar

No 2005/208, IMF Working Papers from International Monetary Fund

Abstract: We use the IMF's Global Fiscal Model to evaluate recent proposals to reform social security and the tax system in the United States. Introducing personal retirement accounts is unlikely to yield significant macroeconomic benefits unless it spurs additional fiscal consolidation to prevent a large increase in government debt. Similar benefits are obtained if the social security surplus is placed in a lockbox while maintaining the same debt target. Lowering the taxation of investment income is beneficial, but only if the reform is revenue neutral. Debtneutral social security and tax reform in the United States has large positive effects on the rest of the world.

Keywords: WP; income tax; personal income; tax reform; tax; Introducing PRAs; Personal retirement accounts; fiscal consolidation; global fiscal model; labor income tax base; consolidation yield; personal income taxation; reform in the United States; personal income tax base; taxation of capital; personal income taxation of capital; tax reform in the United States; Labor taxes; Personal income tax; Real interest rates; Global (search for similar items in EconPapers)
Pages: 22
Date: 2005-11-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=18651 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2005/208

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().