The Constitution grants Congress the power 'to lay and collect taxes, duties, imposts and excises'. From the First Congress until today, conflicts over the size, role and taxing power of government have been at the heart of national politics. This book provides a comprehensive historical account of US tax policy that emphasizes the relationship between taxes and other budget components. It explains how wars, changing conceptions of the domestic role of government, and beliefs about deficits and debt have shaped the modern tax system. The contemporary focus of this book is the partisan battle over budget policy that began in the 1960s and triggered the disconnect between taxes and spending that has plagued the budget ever since. With the US government now facing its most serious deficit and debt challenge in the modern era, partisan debate over taxation is almost completely divorced from fiscal realities.
• Examines the historical development of the US tax system, explains the relative importance of income taxes, payroll taxes and other taxes in the modern era, and discusses the fairness, economic efficiency and revenue-raising characteristics of federal tax policy • Analyzes US tax policy in its budget policy context, emphasizes how decision making on taxes is affected by spending and fiscal policy, and focuses on Democratic and Republican party tax policy differences • A timely appraisal of the adequacy of the current US tax system in terms of future national security and entitlement commitments and the enormous deficit and problems the federal government now faces
Contents
1. A brief history of federal taxation; 2. The stable era – World War II to the 1960s; 3. Destabilizing tax policy – Vietnam and the 1970s; 4. The Reagan strategy – balancing low; 5. The Clinton strategy – balancing high; 6. Bush, Obama, and fiscal deadlock; 7. Reconnecting taxes and budgets.
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