One of the more hotly debated policy questions surrounding tax reform is how revenues are affected by changes in the tax code. The current standard for assessing such changes does not take into account growth effects from tax cuts, which in turn boost revenues. Ignoring such effects can make tax cuts appear more costly to government coffers than they ultimately are. To provide a clearer picture of the tax reform alternatives detailed in the final report of the President’s Advisory Panel on Federal Tax Reform, the Treasury Department performed an assessment—a dynamic analysis—on the panel’s reform alternatives that would incorporate possible economic growth resulting from the tax cuts.

At this AEI conference, Robert Carroll and Craig Johnson of the U.S. Treasury Department will present a paper that summarizes their analysis of the panel’s tax reform proposals. A panel of experts will comment.