Taxing Capital Income

The question of whether to tax income from wealth has sparked debate since our country’s inception. Does taxing capital income ensure the progressivity of our system or merely discourage saving? Would switching our tax code to one that taxes only consumption be more efficient or only burden middle- and low-income people? And if we were to radically reform the way America taxes its citizens, how could we ensure that vital revenue would not be lost? Some analysts would even argue that, under our present byzantine tax system, we don’t really tax capital income at all. In this volume, eminent economists analyze the problems associated with taxing capital income and propose policy solutions, which are then challenged by their peers in informed commentary. It may not settle the debate, but policymakers, scholars, and the public will find a wealth of information and ideas to consider.

Henry J. Aaron is a Bruce and Virginia MacLaury Senior Fellow at the Brookings Institution and was previously its director of Economic Studies Program. He has also served as assistant secretary for planning and evaluation at the Department of Health, Education, and Welfare and has chaired the Advisory Council on Social Security. He has been vice president and member of the executive committee of the American Economic Association and president of the Association of Public Policy and Management.Leonard E. Burman is director of the Urban–Brookings Tax Policy Center, a senior fellow at the Urban Institute, and a visiting professor at Georgetown University. Dr. Burman served as deputy assistant secretary of the Treasury for Tax Analysis and as senior analyst at the Congressional Budget Office. He is the author of The Labyrinth of Capital Gains Tax Policy: A Guide for the Perplexed, and numerous articles, studies, and reports. He is also a commentator for Marketplace.C. Eugene Steuerle is a senior fellow at the Urban Institute and codirector of the Urban–Brookings Tax Policy Center. He has served as deputy assistant secretary of the Treasury for Tax Analysis, president of the National Tax Association, chair of a Technical Panel advising Social Security, president of the National Economists Club Educational Foundation, and economic coordinator and original organizer of the Treasury’s tax reform effort. Dr. Steuerle’s latest book is Contemporary U.S. Tax Policy.