The One Big Beautiful Bill Act (OBBBA) instituted a cap on the marginal tax benefit of itemized deductions of 35 percent beginning in 2026. We present conventional 10-year revenue forecasts and distributional tables for two options: Lower the cap on the marginal tax benefit of itemized deductions from 35 percent to 32 percent (Option 1) or to 24 percent (Option 2), beginning in 2026. The 32 percent cap would raise $110 billion over ten years. The 24 percent cap would raise $475 billion over ten years.
Senator Romney’s Proposed Family Security Act
In early February 2021, Senator Mitt Romney (R-UT) proposed the Family Security Act to consolidate several forms of federal child assistance into a single, expanded child benefit to be administered through the Social Security Administration (SSA).
The act would provide a fully-refundable child allowance of $4,200 annually ($350 per month) per child ages 0-5, and $3,000 annually ($250 per month) per child ages 6 through 17. The credit would phase out at a rate of $50 for every additional $1,000 of income above the phase out threshold ($200K single / $400K joint).
The act would also simplify the existing structure of the Earned Income Tax Credit (EITC), so that the value of the credit is determined by filing status (married or single), and whether or not there are any eligible dependents (the number of dependents would no longer affect the value of the credit).
Other proposed changes to the tax code include elimination of head of household status, elimination of the child and dependent care credit (CDCTC), and elimination of the State and Local Tax (SALT) deduction.
PWBM projects that this proposal would cost $283 billion over the budget window, not including proposed changes to SNAP eligibility and elimination of TANF.
The Biden Platform
Presidential candidate Joe Biden’s campaign has released a substantial list of policy proposals. PWBM finds that over the 10-year budget window 2021 – 2030, the Biden platform would raise $3.375 trillion in additional tax revenue and increase spending by $5.37 trillion. Including macroeconomic and health effects, by 2050 the Biden platform would decrease the federal debt by 6.1 percent and increase GDP by 0.8 percent relative to current law. Almost 80 percent of the increase in taxes under the Biden tax plan would fall on the top 1 percent of the income distribution. Please see our analysis of the estimate for more information on the proposals.
The Updated Biden Tax Plan
We estimate the budgetary, distributional and economic effects over the 10-year budget window (2021 - 2030) of Presidential Candidate and Former Vice President Joe Biden's updated tax plan. Detailed summaries of each proposal can be found in our analysis of this estimate and our analysis of the previous version of his plan.
The Biden Tax Plan
We estimate the budgetary, distributional and economic effects over the 10-year budget window (2021 - 2030) of Former Vice President Joe Biden's tax plan, which raises taxes on high-income households through ten specific proposals, united around the common theme of raising taxes on capital income. Detailed summaries of each proposal can be found in our analysis of the estimate.
Eliminate Itemized Deductions
We estimate the budgetary, economic and distributional effects of eliminating all itemized deductions. The policy would be enacted on January 1st, 2021.
Tax Reform 2.0
Please see our previously published analysis.
The Tax Cuts and Jobs Act: Extending Changes to Individual Taxes
Please see our previously published analysis.
The Tax Cuts and Jobs Act
Please see our full analysis of the conventional and dynamic revenue estimates and the macroeconomic effects estimates, the conventional distributional effects estimate, as well as the effects by industry estimate.
