Neutral Taxation of Capital Income: An Achievable Goal?

The U.S. government is expected to provide macroeconomic management to minimize unemployment and inflation and to maintain productivity growth. This management function did not appear to be performed adequately during the late 1970's or early 1980's since the United States experienced unemployment, inflation, and a decline in productivity growth.1 During this period, critics (often referred to as "supply-siders") of government economic management focused on issues of capital formation. They argued that the