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New York Times reporters Ana Swanson and Tim Tankersley compared the revenue generated by tariffs on China with the costs of the trade war to U.S. businesses and consumers. Tariffs on Chinese goods have raised $20.8 billion in revenue. However, President Trump has promised$28 billion to compensate farmers alone. PWBM explains that tariffs raise the price of goods. PWBM’s Richard Prisinzano noted, “The tariffs make all consumers worse off.”  In addition, Kent Smetters, PWBM’s Faculty Director, estimated that the tariffs could, “cost the median U.S. household with earnings of $61,000 about$500 to $550 a year.” # Policymakers Cite PWBM Estimates About Indexing Capital Gains to Inflation On July 12, 2019, Senator Sherrod Brown (D-OH) and Ron Wyden (D-OR) wrote a letter citing PWBM to the Steve Mnuchin, Secretary of the Treasury, to reject a plan to change tax law so that capital gains would be adjusted for inflation. The law change would cut taxes paid on the sale of assets such as stocks, real estate, and other investments. The # Differential Tax Rates Create Opportunities for Tax Avoidance On June 7, Hill staffers, fiscal experts, and PWBM gathered to discuss the federal revenue loss created by tax avoidance. The U.S. has different tax rates for different income streams, thus there are opportunities for individuals and businesses to reduce their tax bills by recharacterizing income to pay a lower rate. # The Effects of Growing Federal Debt on the United States’ Economy In today’s low interest rate environment, the cost of federal debt is lower than it used to be. However, long-run concerns loom. PWBM projections show that policies that reduce federal debt over time produce more economic growth than current policy. # The White House's Plan to Indexing Capital Gains to Inflation Bloomberg’s Saleha Mohsin reports the Trump administration’s plan to index capital gains to inflation. Citing PWBM’s analysis, Mohsin highlights that indexing capital gains will disproportionately benefit those with high incomes. # Projections for the Evolution of the Unauthorized Immigrant Population in the United States PWBM projects the number of unauthorized immigrants to fall from a peak of 4 percent of the U.S. population in 2007 to under 2.5 percent in 2050. In recent years, fewer unauthorized immigrants have arrived from Mexico while more have arrived from Central America. PWBM projects that future growth of the population of unauthorized immigrants will be driven by visa overstays. # Projections for the Evolution of Naturalized Citizens in the United States PWBM projects that by 2050 one in ten U.S. citizens will be foreign-born, up from 7 percent today. We account for different historical naturalization patterns of immigrants from different countries, including the time immigrants reside in the U.S. Thus, this increase reflects shifts in the origins of lawful immigrants. In particular, we project that the shift away from immigrants arriving from Mexico and toward immigrants arriving from Asia to continue. # The Effects of Changes to Immigration Policy on the United States’ Population We project that increasing annual net legal immigration leads to a younger and more educated U.S. population. These population changes are likely to have a positive impact on entitlement finances and tax burdens relative to current policy. In contrast, decreasing annual net legal immigration likely has the opposite effects. # 2020 Presidential Campaign Proposals for Immigration Policy: Indicators of the Economic Impact on Each State Introducing PWBM’s Interactive 2020 Campaign Issue State Maps. We use data to inform people about the impact of campaign proposals on their states. Here we present six indicators focused on immigration policy for each state. Although PWBM has shown that increasing immigration boosts economic growth for the U.S. as a whole, these indicators imply that the impact of changes to immigration policy on a state will depend on the demographics of that state. # Immigration Policy: 2020 Presidential Campaign State-Level Economic Indicator Map Use data to get information about the impact of campaign proposals on states. Examine six indicators focused on immigration policy for each state. See the percent of the population that is foreign-born, the percent of the foreign-born population with a bachelor’s or advanced degree compared with the percent of the native-born with a bachelor’s or advanced degree, the old-age dependency ratio, the child dependency ratio, and percent of the foreign-born population that is unauthorized for the U.S. and each state. # Policy Options to Increase Charitable Giving Using Tax Incentives By substantially expanding the standard deduction, the Tax Cuts and Jobs Act reduced the incentive to make charitable contributions. We make use of data on non-tax itemizers to examine several potential policies designed to increase tax incentives for charitable giving. In particular, we project that a non-refundable credit for charitable contributions for filers who don’t itemize would expand giving by$208 billion (5.2 percent) and reduce tax revenue by $267 billion (0.6 percent) over the 10 year budget window. Other reforms produce smaller increases in giving along with smaller losses in revenue. # Marty Feldstein: Influential Advisor to Policymakers, Economists & Students Marty Feldstein was the most influential U.S. economic policy adviser during the past half century. He was incredibly generous with his time, he pushed students to think about the economic intuition of their ideas. The teaching of sensible economics stands the course of time, and Marty was a steadfast defender of it. # PWBM Projections In-Line with Official Government Estimates In the Congressional Research Service’s report on the economic effects of the 2017 tax bill, Senior Specialist in Economic Policy Jane Gravelle and Specialist in Public Finance Donald Marples analyzed the effects of the Tax Cuts and Jobs Act (TCJA) on output and growth. # Federal Debt Still Matters Lower interest rates since 2008 have reduced the cost of federal debt per dollar relative to the period before 2008. However, PWBM projects that the sheer size of federal debt will reach 190 percent of GDP by 2050 under present law. Even with low borrowing rates, stabilizing the debt-to-GDP level at its current value could increase GDP in 2050 by one to three times more than the projections we previously provided for the 2017 Tax Cuts and Jobs Act. # Tariff’s Projected to Raise Prices for Americans The New York Times’ Jim Tankersley cites PWBM in an explanation of how Trump's tariffs erase the benefits of the current tax cuts. In particular, Tankersley finds that the benefits of Trump's tax cuts to the lower and middle classes will likely unwind as a result of his tariffs on goods from China, Mexico, and Europe. # Seven U.S. Economic Models Project Rapid Growth of Federal Debt At the National Tax Association Spring Symposium, PWBM participated in a roundtable with other economic modelers. All modelers showed the results of cutting Social Security benefits by one-third in 2031. All models found that even with a benefit cut, by mid-century the U.S. still has a sizable debt-to-GDP ratio. # The$2 Trillion Congressional Democrat and White House Infrastructure Proposal

• Due to various offsets, a $2 trillion federal investment would increase infrastructure spending across all levels of government increases between$440 billion and $2,033 billion---including the original$2 trillion---based on evidence of past experience.

• If a gas tax were used to fully fund the $2 trillion investment, the gas tax would have to rise by$1.67 per gallon for 10 years, thereby increasing the current federal gas tax from $0.184 (18.4 cents) per gallon to$1.854 per gallon.

# The Expansion of the EITC Across States

An interactive map shows the history of state-level expansion of the Earned Income Tax Credit (EITC) across the United States. States with Democrat governments and Democrat-Republican mixed governments are more likely to expand state-level EITC programs.

# Effects of the Closure Rule in PWBM’s Dynamic OLG Model

The closure rule is a necessary model assumption that prevents the debt-to-GDP ratio from exploding in the long-run. PWBM finds that each closure year assumption delivers similar results for macroeconomic variables over the next two decades.