We construct a computational dynamic stochasticand explore the impact of policy stickiness on optimal long-run fiscal policy.

The following is a summary highlighting testimony by AEI Director of Economic Policy Studies Kevin Hassett to the Joint Economic Committee at a hearing entitled "How the Taxation of Capital Affects Growth and Employment."

The U.S. government must act decisively to rectify its unsustainable fiscal position.

This Outlook outlines six simple—and bipartisan—changes to the tax code that can help the country move toward a tax code aimed towards economic growth and away from complex regulations and political favoritism.

When formulating fiscal policy, to what extent can policymakers accurately assess policy and to what extent do private agents act in undesirable and unforseen ways?

Hassett and Auerbach discuss long-run fiscal policy.

Politicians have frequently directed harsh rhetoric toward particular corporate taxpayers that earn high profits. At times, this rhetoric has been accompanied by policy proposals that single out a narrow set of profitable taxpayers for disparate treatment. Perhaps the most notable example is the war against Big Oil.

The revenue loss from reducing the corporate tax rate would be smaller than one might expect--and a gas tax increase might make up any shortfall.