U.S. and Swedish Trends in Tax Reform
Tax reform has become a major governmental policy issue in the United
States as well as in the rest of the world. Countries are attempting to balance
both economic efficiency and provide equity in taxation. Governments are
looking to rewrite tax codes to minimize their impact on economic growth.
Specifically, governments throughout the world are attempting to preserve
incentives built into taxation to maximize economic efficiency. At the same
time, these governments are trying to cope with the growth in social welfare
programs throughout the past three decades. In this paper I shall discuss two
nations which dramatically overhauled their tax systems, and whether or not
their goals with tax reform were achieved.
In the article "The tax reform act of 1986: Did Congress love it or
leave it?", Randall Weiss discusses the attitudes about taxes in the United
States. He details the events and attitudes leading to the Tax Reform Act of
1986, and shows how public perception about taxes has changed since then. He
also discusses some of the tax reform proposals that are now currently being
thought about in Congress.
In 1986 the United States Congress enacted the Tax Reform Act (TRA-86).
The act passed with a great deal of bipartisan support. This support was made
possible by two features of the act. The first was that federal income tax
rates were to be cut dramatically. While this would lead one to believe that
federal government receipts were cut substantially as well, it was the second
important feature of the bill that allowed it to be revenue neutral. ...