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.
W2019-1 Prospects for U.S. Labor Productivity Growth: What the Penn-Wharton Budget Model’s Microsimulation Reveals
Authors: Jagadeesh Gokhale
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.
If fully deficit-financed, the $2 trillion infrastructure proposal lowers GDP between 0.1 and 0.5 by 2043, relative to current policy. If fully financed with user fees or higher gas taxes it typically boosts GDP, between -0.1 and 0.4 percent by 2043.
Tariff Increases Will Cost U.S. Households
In Trump’s tariffs are equivalent to one of the largest tax increases in decades CNBC’s Steve Liesman analyses data from the Treasury Department to find that tariffs proposed by President Trump will raise $72 billion in revenue. Previously, PWBM has estimated the economic costs of a trade war and that the impact of a trade war could wipe out economic gains from last year’s tax cuts.
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.
USAFacts 2019 Annual Report - Our nation, in numbers.
Forbes Contributor, Sheila Callahan, covered USAFacts release of its third annual report on May 2, 2019. The report highlighted recent shifts in U.S. demographics, noting that seniors, 65 years and older, are now 16 percent of the population.
Gig Economy Workers Face Tax Hurdles
Knowledge@Wharton invited Senior Economist at PWBM, Richard Prisinzano, on as a guest speaker on April 12, 2019, as well as Christine Speidel of Villanova University’s Federal Tax Clinic , to discuss discuss personal taxes, focusing on gig economy workers.
First Tax Day Under the Tax Cuts and Jobs Act
CNN reported on the first Tax Day under the Tax Cuts and Jobs Act. Lydia Depillis highlighted key economic effects of the 2017’s Tax Cuts and Jobs Act.
Analysis of Fiscal Therapy: Conventional and Dynamic Estimates
PWBM projects that the proposals in Fiscal Therapy by William Gale would reduce the debt to-GDP ratio from 188 percent to 17 percent in 2050 and increase long-run economic output by 7 percent.
Americans Startled by Impact of New Tax Law on Returns
Knowledge@Wharton invited Senior Economist at PWBM, Richard Prisinzano, on as a guest speaker on March 12, 2019, as well as the Center for Tax Law and Policy’s Michael Knoll, to discuss the impact of the TCJA’s tax changes on tax filers this year.