In broad terms, U.S. domestic tax policy since 1981 has reflected an effort to reduce the federal tax burden, especially on capital. Taking a long view, resulting reductions in funding for many public and quasi-public goods have reduced total social wealth, which in turn has contributed to a smaller tax base and larger federal deficits. In response, Congress has continued to cut spending in an effort to manage the deficits, apparently unconcerned about the relationship between funding these goods and maintaining the tax base over the long term. The discussion focuses both on specific areas in which the trend is significant and on whether and how the trend can be reversed in the foreseeable future.
