Panel Discussion: Alternative Tax Policies for the Future in Light of the Current Economic and Budget Outlook

At the present time, neither side in the US budget debate is talking realistically about the magnitude of change in taxes or expenditures that will be required. Americans have allowed government spending to get out of line with taxes. Since there is no public support for tax increases, the budget deficit will remain and the US will continue to borrow overseas for its financing. The next few years will see increased interest in federal taxes based on consumption rather than income. The type of consumption tax chosen will have other important implications. The automatic sources of funds that paid for past changes in priorities, including expansion of various domestic expenditure programs, are no longer available. The requirement to make simultaneous expenditure and tax decisions often results in inadequate consideration of tax policy principles.