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Chapter 9 makes an important contribution, both in urging that simplification proposals be subjected to quantitative analysis and in attempting to do so. Equally important is the assumption underlying their work: that the distributional and efficiency impact should be analyzed and weighed in evaluating simplification proposals, just as it is with any other tax reform proposal. The authors correctly point out that these reform efforts usually are supported or evaluated only on simplification grounds, with little regard to their distributional or efficiency effects. This failure is an aspect of the familiar second-best problem that attends all tax system reform (as contrasted to tax system design). Changes that in the abstract might be efficient, for example, may decrease efficiency in a second-best world. That is no less true of simplification proposals than it is of any other type of reform.

Source Publication

The Crisis in Tax Administration

Source Editors/Authors

Henry J. Aaron, Joel Slemrod

Publication Date

2004

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