Flexible Taxation

Archive Report

Flexibility in the Federal Income Tax

Occurrence of a second business recession in the space of three years has given special prominence to proposals, long debated by economists, to introduce some measure of flexibility into the rate schedules of the federal income tax. The purpose would be to make tax policy effective as an instrument for combating recession or inflation. Flexibility would be attained by making statutory provision for downward or upward rate adjustments, either automatically according to a formula based on standard economic indexes or at the discretion of the President.

Several of President Kennedy's key economic advisers, believing that present monetary and fiscal policies do not lend themselves to checking an economic slump with sufficient dispatch, have urged adoption of the flexible system. Some ...

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