Table 1. Conventional Budget Estimate, FY2020-2029
Billions of Dollars, Change from Current-Law Baseline
Policy | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | Budget window |
---|---|---|---|---|---|---|---|---|---|---|---|
Temporary | -98 | -130 | -135 | -140 | -145 | -151 | -35 | 0 | 0 | 0 | -834 |
Permanent | -98 | -130 | -135 | -140 | -145 | -151 | -127 | -123 | -129 | -133 | -1,311 |
Table 2a. Dynamic Macroeconomic Effects of Temporary Rate Reduction
Percent Change from Baseline
Year | GDP | Capital stock | Labor income | Hours worked | Consumption |
---|---|---|---|---|---|
2030 | 0.1% | 0.6% | 0.1% | -0.1% | 0.4% |
2040 | 0.1% | 0.3% | 0.1% | -0.1% | 0.3% |
2050 | -0.1% | -0.1% | -0.1% | -0.1% | 0.1% |
Note: Consistent with empirical evidence, the projections above assume that the U.S. economy is 40 percent open and 60 percent closed. Specifically, 40 percent of new government debt is purchased by foreigners.
Table 2b. Dynamic Macroeconomic Effects of Permanent Rate Reduction
Percent Change from Baseline
Year | GDP | Capital stock | Labor income | Hours worked | Consumption |
---|---|---|---|---|---|
2030 | 0.4% | 0.6% | 0.4% | 0.4% | 1.5% |
2040 | 0.4% | 0.8% | 0.4% | 0.4% | 1.7% |
2050 | 0.4% | 1.0% | 0.4% | 0.3% | 1.2% |
Note: Consistent with empirical evidence, the projections above assume that the U.S. economy is 40 percent open and 60 percent closed. Specifically, 40 percent of new government debt is purchased by foreigners.
Table 3. Distribution of Policy Change by Annual Income Categories in 2020, Relative to Current-Law Baseline
Corporate, individual income and payroll taxes | |||||||||
---|---|---|---|---|---|---|---|---|---|
Income group | Average tax change | Tax units with a tax cut | Tax units with a tax increase | Percent change in after-tax income | Share of tax change | Share of federal taxes paid | |||
Share | Average tax cut | Share | Average tax increase | Share under polcy | Change from baseline (percentage points) | ||||
Bottom quintile | $0 | 0.0% | - | 0.0% | - | 0.0% | 0.0% | -0.3% | 0.0% |
Second quintile | $0 | 0.0% | - | 0.0% | - | 0.0% | 0.0% | 0.7% | 0.0% |
Middle quintile | -$60 | 12.9% | -$475 | 0.0% | - | 0.1% | 1.8% | 8.6% | 0.3% |
Fourth quintile | -$755 | 49.4% | -$1,525 | 0.0% | - | 0.9% | 19.4% | 17.3% | -0.1% |
80-90% | -$2,500 | 95.2% | -$2,625 | 0.0% | - | 1.9% | 26.4% | 13.5% | -0.6% |
90-95% | -$5,100 | 96.8% | -$5,270 | 0.0% | - | 2.8% | 25.4% | 10.2% | -0.8% |
95-99% | -$5,410 | 94.1% | -$5,750 | 0.0% | - | 1.8% | 21.8% | 17.5% | -0.2% |
99-99.9% | -$5,245 | 88.9% | -$5,900 | 0.0% | - | 0.6% | 4.7% | 15.3% | 0.5% |
Top 0.1% | -$4,710 | 81.4% | -$5,790 | 0.0% | - | 0.1% | 0.5% | 17.0% | 0.8% |
Individual income and payroll taxes only | |||||||||
---|---|---|---|---|---|---|---|---|---|
Income group | Average tax change | Tax units with a tax cut | Tax units with a tax increase | Percent change in after-tax income | Share of tax change | Share of federal taxes paid | |||
Share | Average tax cut | Share | Average tax increase | Share under polcy | Change from baseline (percentage points) | ||||
Bottom quintile | $0 | 0.0% | - | 0.0% | - | 0.0% | 0.0% | -0.4% | 0.0% |
Second quintile | $0 | 0.0% | - | 0.0% | - | 0.0% | 0.0% | 0.4% | 0.0% |
Middle quintile | -$60 | 12.9% | -$475 | 0.0% | - | 0.1% | 1.8% | 8.8% | 0.4% |
Fourth quintile | -$750 | 49.3% | -$1,525 | 0.0% | - | 0.9% | 19.4% | 17.8% | -0.1% |
80-90% | -$2,495 | 95.5% | -$2,615 | 0.0% | - | 1.9% | 26.3% | 13.8% | -0.7% |
90-95% | -$5,085 | 96.6% | -$5,260 | 0.0% | - | 2.8% | 25.3% | 10.4% | -0.8% |
95-99% | -$5,480 | 94.9% | -$5,775 | 0.0% | - | 1.8% | 22.0% | 17.7% | -0.2% |
99-99.9% | -$5,315 | 89.8% | -$5,915 | 0.0% | - | 0.6% | 4.7% | 15.4% | 0.6% |
Top 0.1% | -$4,795 | 82.8% | -$5,795 | 0.0% | - | 0.1% | 0.5% | 15.9% | 0.8% |
Note: “Income” is defined as AGI plus: above-the-line deductions, nontaxable interest income, nontaxable Social Security benefits, nontaxable pensions and annuities, employer-side payroll taxes, and corporate tax liability. Seventy-five percent of the corporate income tax burden is assumed to be borne by the owners of capital income; the rest is assumed to fall on wages. Federal taxes included are individual income, payroll, and corporate income taxes.