Marginal Tax Rate Cuts and the Public Tax Debate

In that the had spring the of primary 2001, President objective of Bush reducing proposed marginal a tax bill inthat had e rimary objectiv of re ucing ma ginal income tax rates. In May, a bill that essentially followed the outlines of the Bush proposal became law. The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) lowered statutory marginal tax rates for many individual taxpayers, and these reductions were phased in over many years. During the course of the public policy debate concerning the likely economic impact of EGTRRA, very little reference was made to the public finance literature concerning the likely impact of marginal tax rate reductions. Instead, proponents of the bill, like the president himself, argued that the reduction in revenue was advisable because it would lower the