Transition Costs of Fundamental Tax Reform By Kevin A. Hassett, R. Glenn Hubbard AEI Press (Washington); pp.126; $16.95

Excerpt:

Given the ideological beliefs of the American Enterprise Institute, it is no surprise that these articles conclude that gains from fundamental tax reform would be significant. Consequently, it is fair to wonder whether a reader can rely on the results with any degree of comfort. Ignoring the results, however, I think that the primary objective of reading these articles (and the related discussions) is to attain a better understanding of how tax rules affect economic behavior and asset prices. The models described in these articles discuss factors that are rarely considered in tax research performed by accounting scholars or in tax textbooks used in accounting courses. Certainly, tax scholars who are interested in FTR will benefit from reading this book. Researchers interested in understanding the relation between taxes and asset prices can also benefit from these articles. In a classroom setting, knowledge and dissemination of the insights from these articles could lead to some lively discussions on the effect of taxes on asset prices.

Kevin A. Hassett is a resident scholar at AEI. R. Glenn Hubbard is a visiting scholar at AEI and the Russell L. Carson Professor of Economics and Finance at Columbia University; President Bush has nominated him to be chairman of the Council of Economic Advisers.