Dynamic Tax Models: Why They Do the Things They Do

Fundamental tax reform has received a lot of attention during the past year. Unfortunately, different models suggest very different quantitative conclusions for similar reforms. Even more unfortunate is that it is has been difficult until now to know why the results differ, since not only do the models vary in features but also in initial calibration. The innovation of this paper is to examine a broad range of models, where each model is calibrated to generate the same initial economy. This allows us to focus on model features without concern as to whether differences in the initial calibration are driving the results.