Dynamic analysis would suggest that as much as one-third of the static revenue loss would be recouped through more work and savings. Newt Gingrich and Trent Lott have announced that Republicans will cut taxes again in 1998. The bigger the tax cut, the better. The President's tax plans are deeply flawed in this area. Tax cuts in 1998 should make the tax code simpler and the tax burden lighter.
Inflation is a thief.
It is not fair to tax Americans purely on phantom gains. In this low inflation environment, indexing capital gains would not impose much of a cost on the Treasury, but would provide investors an insurance policy against a return to a high inflation regime. Bill Archer and Paul Coverdell's ideas are sound. Marginal rate cuts are necessary to improve American competitiveness in the global economy. We should broaden the 15 percent tax bracket this year.