MONETARY IMPLICATIONS OF TAX REFORMS

Recently, several proposals for significant reform of the federal tax system have received serious political consideration, and many sound a rguments for and against these proposals have been made. Although we s ummarize some of the economic arguments in this paper, it is not our p urpose to discuss the merits of the proposals. Rather, our purpose is to show that, whatever proposal is adopted, it will be affected by and will affect the making and carrying out of monetary policy.