We present budgetary and economic estimates for President Trump's proposed corporate income tax rate reduction from 21 percent to 20 percent.
President Trump’s Proposed Capital Gains and Dividend Tax Cut
PWBM estimates that reducing the top preferential rates on capital gains and dividends from 20 percent to 15 percent will cost $98.6 billion dollars over the ten year budget window. This tax cut will only benefit tax units in the top 5 percent of the income distribution, with 75 percent of the benefit accruing to those in the top 0.1 percent of the income distribution. Please refer to our analysis of the estimate for more information.
Forgiveness of Deferred Payroll Taxes
We estimate the budgetary and distributional effects of permanently forgiving the September to December 2020 payroll tax deferral under President Trump's August executive order. We project that this forgiveness would cost $122 billion dollars.
Short-Term Economic Effects of the Trump $1 Trillion Infrastructure Plan
We estimate that the anticipated Trump administration bill to invest $1 trillion in infrastructure would increase GDP up to $720 billion through June 2022. For more information, please see our full analysis.
President Trump’s Payroll Tax Holiday
In response to the economic effects of the coronavirus, President Trump has proposed a payroll tax holiday that would temporarily eliminate all Social Security and Medicare payroll taxes through December 31st, 2020. We estimate the budgetary, distributional and economic effects if the holiday were run from April 1 through December 31, 2020. Updated on March 17, 2020 to include two scenarios for how the employer side of the tax cut would be distributed: either to the full benefit of business owners and corporate equity holders (“profits rise”) or to the full benefit of workers (“wages rise”).
The White House FY 2019 Infrastructure Plan
Please see our full analysis.