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Spotlight

First Tax Day Under the Tax Cuts and Jobs Act

CNN reported on the first Tax Day under the Tax Cuts and Jobs Act. Lydia Depillis highlighted key economic effects of the 2017’s Tax Cuts and Jobs Act.

Americans Startled by Impact of New Tax Law on Returns

Knowledge@Wharton invited Senior Economist at PWBM, Richard Prisinzano, on as a guest speaker on March 12, 2019, as well as the Center for Tax Law and Policy’s Michael Knoll, to discuss the impact of the TCJA’s tax changes on tax filers this year.

Annual Data is Better than Monthly for Understanding Tax Revenues

FactCheck.org’s Eugene Kiely explored how to think about the impact of 2017’s Tax Cuts and Jobs Act (TCJA) on tax revenue through official measures of tax receipts. Treasury reports show that in 2018 tax receipts were slightly lower than in 2017. However, tax receipts in February 2019 were 10% higher than in February 2018. Kiely asked PWBM’s Alexander Arnon what these figures mean for future tax receipts.

Need Help Understanding the Impact of the New Tax Law on You? Check Out The Wall Street Journal Tax Calculator Powered By PWBM

On March 4, Dylan Moriarty and Richard Rubin presented the Wall Street Journal Tax Calculator, powered by Penn Wharton Budget Model, to help taxpayers understand tax law as they prepare their taxes. Taxpayers only need to enter a few key characteristics such as income and marital status to get an estimate of their tax liability from 2018 to 2027.

Experts Debate Impact of TCJA on Growth and Investment

The Economist’s print edition, published February 7th, reports that “Some Fights About the Tax Cuts and Jobs Act Seem Over.” Public opinion polls indicate that voters think that “large corporations and rich Americans” are the ones benefiting from the tax law. Meanwhile, policy analysts continue to debate the details.

Raising Taxes on the Rich Can Have Unintended Consequences

Penn Wharton Budget Model Senior Economist Richard Prisinzano discussed raising taxes on the wealthy with Alan Auerbach, Professor of Economics and Law at University of California Berkeley, and Knowledge@Wharton host Dan Loney. You can listen to the full discussion below.

Growth in Business Investments Tied to Oil Prices, Not Tax Cuts

The New York Times reported Tuesday that the Trump Administration’s “rosy” outlook on the U.S. economy is “increasingly diverging” from economists’ forecasts. The White House predicted that the economy will continue to grow at 3 percent through 2024 (adjusted for inflation), while the Congressional Budget Office (CBO) released their forecasts standing at 2.3 percent for 2019, slowing to 1.7 percent in 2020. Meanwhile, the Federal Reserve’s forecast also predicts 2.3 percent growth in 2019, and Goldman Sachs suggested a more conservative 2.1 percent growth this year based on consumer confidence figures and regional business surveys.

The Economic Boost from the Tax Bill is Temporary

On October 11, 2018, the CNN show, “Quest Means Business” features a heated debate about the recent rate hikes by the Federal Reserve and President Trump’s disapproval of them, in which he cites recent economic growth. Opinion columnist for “The Washington Post”, Catherine Rampell, cites PWBM — alongside the Congressional Budget OfficeInternational Monetary Fund, and Federal Reserve — as finding that the economic boost from the Tax Cuts and Jobs Act is temporary.

As Predicted TCJA Isn’t Paying For Itself: Confirmed by Figures from the Treasury Department

Jim Tankersley emphasized how recent tax reform will not pay for itself in his New York Times article, "No, Trump’s Tax Cut Isn’t Paying for Itself (at Least Not Yet)." Even though federal revenues increased marginally in 2018, it will not be enough to cover the tax cut. On October 15th, the Treasury Department announced that despite economic growth and low unemployment, the federal budget deficit grew by 17 percent.

Tax Reform 2.0 Projected to Cost $614 Billion Over 10 Years

In Yes, the Tax Cuts Have Cost the U.S. Treasury Money Bloomberg’s Justin Fox describes how tax revenue in 2018 is lower than tax revenue in 2017. Over the first six months of 2018, the cost of the Tax Cuts and Jobs Act was generally in line with PWBM’s December projections.

86% of Gains from Indexing Capital Gains Goes to Top 1%

Alan Rappeport and Jim Tankersley of The New York Times cite Penn Wharton Budget Model’s forecast of the fiscal and social effects of adjusting capital gain taxes for inflation in their piece, Trump Administration Mulls a Unilateral Tax Cut for the Rich.

Strong 2018 Q2 Economic Growth Unsustainable

Washington Post columnist Catherine Rampell uses Penn Wharton Budget Model’s analysis of tax reform to delve into the implications behind strong second quarter U.S. economic growth in The economy’s great. That doesn’t mean Trumponomics is.

Consumers Getting Hit at the Pump

In Small Towns Are Booming, Thanks to Rising Oil Prices, The Wall Street Journal’s Rebecca Elliot and Harriet Torry cite PWBM research on the recent rise in gas prices.

Steve Ballmer Talks USAFacts with Andy Serwer at PWBM’s First Spring Policy Forum

Yahoo Finance Video shows Andy Serwer’s interview with Steve Ballmer from the Penn Wharton Budget Model’s June 22nd Spring Policy Forum. Steve Ballmer, co-founder of USA Facts, owner of the LA Clippers former CEO of Microsoft, spoke on the potential of USAFacts to promote fact-based public policymaking.

New Tax Law Set to Trigger Conversions From Pass-Through Entities to C-Corporations

Politico’s Ben White and Aubree Eliza Weaver write about the Penn Wharton Budget Model’s projection of business entity classification conversions in the aftermath of the Tax Cuts and Jobs Act (TCJA) in Morning Money: The Big Switch from Pass-Throughs.

Capitol Hill Push to Change Taxes on Capital Gains

Naomi Jagoda relies on the Penn Wharton Budget Model’s analysis of the push on Capitol Hill to change tax law to adjust capital gains for inflation in Senate Dems to Mnuchin: Don't index capital gains to inflation.

Senate GOP Wary of New Tax Cut Sequel

In his article “Senate GOP wary of new tax cut sequel,” Alexander Bolton described Republican reactions to the CBO scoring of the new tax bill and opinions over making the individual tax cuts permanent. He cites projections from Penn Wharton Budget Model (PWBM) in order to demonstrate the likely effects on the national debt from extending the individual tax cuts.

The White House's Trade Policies and the Economy

A recent CNBC article by John Harwood, Peter Navarro says Trump’s trade policies are ‘good for the market,’ but economists aren’t buying it, applies two Penn Wharton Budget Model (PWBM) studies on the effects of tax cuts by industry and the probable effects of a trade war. The author analyzes the possibility that recent administration actions increasing protectionist measures would slow economic growth.

Incentives and Corporate Tax Cuts

Justin Wolfers’ New York Times article, "How to Think About Corporate Tax Cuts" analyzes the economic effects of President Trump’s corporate tax cuts and references Kent Smetters of Penn Wharton Budget Model. While the tax bill promises to increase the incentive to invest and gives companies more cash, Smetters argues that in the short run giving more money to corporations helps the owners.

The Impact of a Trade War Could Wash Out Tax Cuts

A CNNMoney story, “Trade War Would Wipe Out Gains From Tax Cuts, Penn Analysis Says,” applies two Penn Wharton Budget Model (PWBM) studies on trade and tax cuts. Patrick Gillespie points out that two of President Trump’s policies could have opposing effects on economic growth. If the new tariffs announced by President Trump lead to an all-out trade war, gains from the tax cuts could be washed away in the short run and swamped in the long run.