Surplus tax policy?

The emergence of large and apparently growing budget surpluses represents a paradigm shift for tax policy. This speech examines and dismisses some contrarian views about the effect of surpluses on fiscal well being, and then addresses three questions: (1) Is the surplus real? (2) Do surpluses or deficits matter? (3) Should surpluses change the rules of tax policy? The speech concludes that the Administration's fiscal year (FY) 2000 budget framework, if enacted, would advance fundamental tax policy principles of fairness, simplicity, and economic growth without abandoning the fiscal discipline that brought us a strong economy and budget surpluses.