Government Tax and Spending Policy
As noted above, Pressman has published work advocating that government tax and spending policy is a main determinant of poverty and the size of the middle class in developed countries. He has then gone on to argue for more progressive fiscal policies to support poor and middle class households in the United States. He has also argued that these redistributive programs would not have many negative effects.
He has analyzed the U.S. Current Population Survey, and articulated a policy to eliminate tax deductions for children and convert them into a refundable tax credit. This would essentially give the United States a system of child or family allowances, similar to other developed nations throughout the world. Such a policy change would help low and moderate-income households at no additional cost. It would also greatly reduce child poverty in the U.S. and increase the size of the U.S. middle class.
Pressman has published articles articulating how state governments should deal with the dilemmas of taxing e-commerce, arguing that states need to move away from relying on regressive sales taxes and use more progressive forms of taxation.
Finally, Pressman has shown that there is little empirical evidence that government deficits crowd out consumption, business investment, or net exports. There is, however, good empirical evidence that, when used appropriately, fiscal policy is able to mitigate business cycles.
Read more about this topic: Steven Pressman (economist)
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