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Brief, Tax Policy, Economic Growth
Mariko Paulson
Senator Elizabeth Warren’s Wealth Tax: ...

  • Senator Elizabeth Warren has proposed a wealth tax equal to 2 percent of net worth above $50 million and 6 percent of net worth above $1 billion, which her campaign estimates would raise $3.75 trillion over 10 years.

  • PWBM estimates that the proposal would raise about $2.7 trillion over fiscal years 2021-2030, not including macroeconomic effects. Including macroeconomic effects, PWBM estimates that the proposal would raise about $2.3 trillion over the same period.

  • PWBM projects that the proposal would reduce GDP by 0.9 percent in 2050 under the standard budget scoring convention that additional revenues reduce the deficit. If the revenues were instead spent on public investments, PWBM projects GDP in 2050 would fall between 1.0 and 2.1 percent, depending on the productivity of the investment. Average hourly wages in the economy in 2050, including wages earned by households not directly subject to the wealth tax, would fall between 0.8 and 2.3 percent due to the reduction in private capital formation.

Senator Elizabeth Warren’s Wealth Tax: Budgetary and Economic Effects
Blog Post, Tax Policy
Mariko Paulson
The Revenue-Maximizing Capital Gains Tax Rate: ...

Under current law, PWBM estimates that a 33% capital gains tax rate maximizes revenue, but this rate increases to 42% if stepped-up cost basis at death were eliminated.

Blog Post, Tax Policy, Economic Growth
Mariko Paulson
Policy Options: Increase Tax Rates on Capital ...

We estimate the budgetary and economic effects of increasing the top rate on long-term capital gains and qualified dividends from 20 percent to 24.2 percent, which is enacted on January 1st, 2021. We project that it will raise around $60 billion of additional revenue on a conventional basis over the 10-year budget window and increase GDP by 0.1 percent by 2050.

Blog Post, Tax Policy, Economic Growth
Mariko Paulson
Policy Options: A 1% Value-Added Tax

We estimate the budgetary and economic effects of a new broad-based 1 percent value-added tax (VAT) with a progressive universal rebate calculated based on earnings, which is enacted on January 1st, 2021. We project that it will raise $700 billion of additional revenue on a conventional basis over the 10-year budget window and increase GDP by 0.8 percent by 2050.

Blog Post, Tax Policy, Economic Growth
Mariko Paulson
Policy Options: A Carbon Tax of $30 per ton

We estimate the budgetary and economic effects of a new carbon tax of $30 per ton of emissions, which is enacted on January 1st, 2021, rising by inflation plus 5 percent through 2050. We project that it raises $1.6 trillion of additional revenue on a conventional basis over the 10-year budget window and increases GDP by 2.2 percent by 2050.

Working Paper

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W2024-1 United States’ Federal Indebtedness and Fiscal Policy Trade-Offs

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Authors: Jagadeesh Gokhale and Kent A. Smetters

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Explaining the Rise in Prime Age Women’s Employment

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Explaining the Rise in Prime Age Women’s Employment

The economic costs of the COVID-19 pandemic were widely expected to fall disproportionally on women. Instead, the employment rate of prime age women recovered faster than men’s and rose to its highest point in U.S. history in 2023. We show that the resilience of women’s employment is driven by two long-term trends that predate the pandemic and continued through it: 1) the growing share of women who are college graduates, and 2) the rising labor force participation of college-educated mothers with young children.

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W2023-1 Pillar Two and the U.S.: A Policy Explainer for Navigating the Global Minimum Tax

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Author: Lysle Boller

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W2022-2 Fiscal and Generational Imbalances in the U.S. Federal Budget

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Authors: Agustin Diaz, Jagadeesh Gokhale, and Kent Smetters

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W2022-1 Immigration and the macroeconomy

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Authors: Efraim Berkovich, Daniela Costa, and Austin Herrick

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W2019-2 Physician Characteristics and Treatment Modalities in Relation to Patient Satisfaction Scores in Outpatient Primary Care Practices

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Authors: Efraim Berkovich and Alison J. Leff

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W2019-1 Prospects for U.S. Labor Productivity Growth: What the Penn-Wharton Budget Model’s Microsimulation Reveals

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Authors: Jagadeesh Gokhale

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W2018-3 How Initial Conditions Can Have Permanent Effects: The Case of the Affordable Care Act

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Authors: Florian Scheuer and Kent Smetters

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W2018-2 Tax Based Switching of Business Income

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Authors: Richard Prisinzano and James Pearce

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W2018-1 Matching IRS Statistics of Income Tax Filer Returns with PWBM Simulator Micro-Data Output

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Authors: Jagadeesh Gokhale

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