Competitive Externalities of Tax Cuts

Bill Gates recently argued that philanthropy by households at the top of the income distribution might help ameliorate income inequality, and that tax policies should take this into account. Much of the research in economics on giving has been focused on middle-income households, so we know very little about the motives for giving by the very rich. We provide some initial evidence on what drives the giving of the richest Americans. First, we extrapolate anthropological evidence on how status concerns might influence philanthropy. Second, since the richest own a significant amount of equity, we use the Jobs and Growth Tax Relief Act of 2003 to see how their giving responded to unanticipated tax cuts, particularly for dividends. Third, we consider the welfare implications of philanthropy as opposed to alternative models for redistributing the wealth of the extremely rich.

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Medicare's Future: Fact, Fiction and Folly

American Journal of Law & Medicine ◽

10.1017/s0098858800011072 ◽

2000 ◽

Vol 26 (2-3) ◽

pp. 225-253

Author(s):

Theodore R. Marmor ◽

Gary J. McKissick

Keyword(s):

Medical Care ◽

American Politics ◽

Senior Citizens ◽

Financial Protection ◽

National Debt ◽

Acute Medical Care ◽

Tax Cuts ◽

New Millennium

Perhaps no single policy topic better illustrates the tensions within American politics at the beginning of a new millennium than does Medicare, the nation's thirty-five year commitment to ensuring senior citizens' financial protection against the costs of acute medical care. Our politics seems nearly overwhelmed by conflicting promises to balance the budget and pay down the national debt, enact tax cuts and protect broadly popular “entitlements.” Medicare, one of the largest of such entitlement programs, has become a lightning rod for conflicts over how to resolve these competing goals. As a result, the nation finds itself in the midst of a bewildering mix of crisis talk, fact throwing and ideological name calling, with all the confusion and distortion one would expect from such a mix.

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Tax Cuts in Open Economies

Review of Economic Dynamics ◽

10.1016/j.red.2021.05.001 ◽

2021 ◽

Author(s):

Alejandro Cuñat ◽

Szabolcs Deák ◽

Marco Maffezzoli

Keyword(s):

Open Economies ◽

Tax Cuts

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Asymmetric Interest Group Mobilization and Party Coalitions in U.S. Tax Politics

Studies in American Political Development ◽

10.1017/s0898588x15000085 ◽

2015 ◽

Vol 29 (2) ◽

pp. 235-249 ◽

Cited By ~ 4

Author(s):

Alexander Hertel-Fernandez ◽

Theda Skocpol

Keyword(s):

Small Business ◽

Democratic Party ◽

Small Business Owners ◽

Washington Dc ◽

Business Organizations ◽

Public Programs ◽

Deficit Reduction ◽

Group Mobilization ◽

National Tax ◽

Tax Cuts

Arguments about national tax policy have taken center stage in U.S. politics in recent times, creating acute dilemmas for Democrats. With Republicans locked into antitax agendas for some time, Democrats have recently begun to push back, arguing for maintaining or even increasing taxes on the very wealthy in the name of deficit reduction and the need to sustain funding for public programs. But the Democratic Party as a whole has not been able to find a consistent voice on tax issues. It experienced key defections when large, upward-tilting tax cuts were enacted under President George W. Bush, and the Democratic Party could not control the agenda on debates over continuing those tax cuts even when it enjoyed unified control in Washington, DC, in 2009 and 2010. To explain these cleavages among Democrats, we examine growing pressures from small business owners, a key antitax constituency. We show that organizations claiming to speak for small business have become more active in tax politics in recent decades, and we track the ways in which constituency pressures have been enhanced by feedbacks from federal tax rules that encourage individuals to pass high incomes through legal preferences for the self-employed. Comparing debates over the inception and renewal of the Bush tax cuts, we show how small business organizations and constituencies have divided Democrats on tax issues. Our findings pinpoint the mechanisms that have propelled tax resistance in contemporary U.S. politics, and our analysis contributes to theoretical understandings of the ways in which political parties are influenced by policy feedbacks and by coalitions of policy-driven organized economic interests.

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