Former Vice President Joe Biden
PWBM conducted a comprehensive analysis of the Biden platform—including his plans for immigration, tax, education, infrastructure and R&D, housing, Social Security, and healthcare—estimating that:
Over the ten year budget window, 2021-2030, the Biden platform would raise $3.375 trillion in new tax revenue while increasing spending by $5.37 trillion.
The largest areas of new net spending over ten years are education at $1.9 trillion and infrastructure and R&D at $1.6 trillion.
Tax Policy
Households making $400,000 per year or less would not see their taxes increase directly but would see lower investment returns and wages as a result of corporate tax increases, reducing their after-tax income by 0.9 percent. When Biden’s major new tax credits are included, these households instead see their after-tax income increase by 3.3 percent.
Households making above $400,000 per year (the top 1.5 percent) would see their after-tax income decrease by 17.7 percent; this decrease is unchanged when including Biden’s major new tax credit.
PWBM Analysis:
Healthcare
The Biden healthcare plan focuses on expanding access and affordability of insurance and decreasing prescription drug prices.
By 2030, relative to current law, the Biden plan would decrease the uninsurance rate from 10 percent to 6 percent, decrease private insurance premiums by 23 percent and out-of-pocket spending by 16 percent, and decrease the percent of the population that forgoes medical care from 7 percent to 4 percent.
The Biden healthcare plan would increase net healthcare spending by $352 billion over ten years but would reduce debt by 4.5 percent over that period due to dynamic revenue effects.
PWBM Analysis:
Macroeconomic Effects
In total, including macroeconomic and health effects, by 2030 the Biden platform would increase federal debt by 0.1 percent and decrease GDP by 0.4 percent.
In the longer run, by 2050, the Biden platform would decrease the federal debt by 6.1 percent and increase GDP by 0.8 percent.
PWBM Analysis:
Welfare Analysis
- In a dynamic welfare analysis—including macroeconomic and health effects as well as the insurance value of policies—currently higher income young workers and wealthy older retirees generally lose under the Biden platform, while lower-income and working-age individuals gain the most.
PWBM Analysis:
President Donald Trump
While the Trump campaign has released a list of “core priorities” for a second term, most of these proposals lack enough detail to score at a similar level as PWBM's standard analysis.
Tax Cuts
On the tax side, the Trump campaign’s specific proposals are: lowering the current 22 percent income tax bracket rate to 15 percent, reducing the top preferential tax rate on capital gains from 22 percent to 15 percent, lowering the corporate income tax rate from 21 to 20 percent, and forgiveness of payroll taxes deferred under the President’s August executive order. PWBM analyzed these proposals, finding that:
Permanently lowering the current 22 percent income tax rate to 15 percent would cost $1.3 trillion over ten years, with 79 percent of the tax cut going to the top quintile of households by income. By 2050, this tax cut would increase GDP by 0.4 percent.
President Trump’s proposed capital gains tax cut would cost $98.6 billion over ten years, with 98 percent of the tax cut going to the top 1 percent of households by income.
Lowering the corporate tax one percentage point would cost $133.7 billion over ten years. By 2050, this tax cut would reduce GDP by 0.1 percent.
Forgiving deferred payroll taxes would cost $122 billion over ten years—the top 10 percent of households by income would receive about 23 percent of the tax cut, compared to 3 percent for the bottom quintile of households.
PWBM Analysis:
- Model Estimate: Middle-Bracket Rate Cut
- Analyzing President Trump’s Proposed Capital Gains and Dividend Tax Cut
- Model Estimate: Corporate Tax Rate Drop
- Forgiveness of Deferred Payroll Taxes
Infrastructure
On the spending side, the Trump campaign calls for nonspecific investments in infrastructure. In 2019, the Trump administration and Congressional Democrats agreed to a nonspecific $2 trillion infrastructure investment that failed to become law. PWBM analyzed this investment under three potential financing options, finding that:
Fully funding the $2 trillion investment with a gas tax would require increasing the federal gas tax from its current level of 18.4 cents per gallon to about $1.854 per gallon.
Fully funding the investment with user fees or higher gas taxes would change GDP in 2043 by between -0.1 percent and +0.4 percent, depending on how state governments modify their own infrastructure spending.
By 2043, financing the investment with deficits would add between 6.2 percent and 5.3 percent to the federal debt and decrease GDP by between 0.1 and 0.5 percent.
Links to PWBM Analyses