Budges and Taxes

Closing budget deficits is not always the optimal fiscal policy in the short term  or the medium term. Instead, budgets should simply be seen as a tool with which to boost living standards. Sometimes policy needs to move the budget toward a deficit to achieve this; at other times, the budget needs to be moved closer to a balance or surplus.

Reducing budget deficits is too often presented as a key budgetary challenge. Defining fiscal policy this way in the present economic environment, however, is simply bad economic analysis. Instead, the most pressing economic task should be viewed as finally securing a durable return to genuine full employment.



Equitable tax policy in the South

The American South is one of the most racially diverse regions of the country and is famous for its food, hospitality and music. But Southern states also fare worse on most measures of well-being, such as poverty, health and education, partly because they raise less revenue per capita than other states. Inadequate revenue means less financial support for vital public services such as education and health care. A new report from the Institute on Taxation and Economic Policy examines the racist policies that led to the South’s regressive tax laws.