Number: RL30948
Title: Fashioning A Tax Cut Trigger: Economic Issues
Authors: Marc Labonte, Government and Finance Division 
Abstract: This report considers several interesting economic implications of formulating a trigger policy. These include the pro-cyclicality of a trigger policy, how the phase-in provisions of the tax cut correspond with the forecasted surpluses, political considerations concerning a trigger's effectiveness, the uncertainty inherent in budget projections, the policy implications of choosing different budgetary figures to target, how much of the debt will be available for retirement, and how triggers may affect individuals' decision-making. All of these considerations point out the complexity of designing an effective trigger.
Pages: 10
Date: Updated January 29, 2002