Inheritances by Age and Income Group
Households in the top 5 percent of the income distribution receive inheritances between 4 to 12 times larger than households in the bottom 80 percent, depending on the exact definition of inheritance used.
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Projections of Global Intangible Low-Taxed Income: A Validation Exercise
Under current law, PWBM projects that U.S. multinationals will report a cumulative $3.6 trillion in Global Intangible Low-Taxed Income (GILTI) between 2022 and 2031. Data released in July 2021 by the Internal Revenue Service for the 2018 tax year provides the first opportunity for a more extensive validation of PWBM’s model of U.S. multinationals’ tax returns. PWBM projects 2018 GILTI within 5.3 percent of the IRS value, suggesting a very good model fit.
President Biden’s FY2022 Budget Proposal: Budgetary and Economic Effects
PWBM estimates that President Biden’s FY2022 budget proposal would increase spending by $5.9 trillion and increase revenue by $3.9 trillion over the 2022-2031 budget window. By 2050, we project that the President’s budget proposals would decrease public debt by 7.3 percent and decrease GDP by 1.1 percent relative to current law.
Bipartisan Senate Infrastructure Deal: Budgetary and Economic Effects
The bipartisan Senate infrastructure deal, endorsed by President Biden, authorizes $1.2 trillion of spending, representing about $579 billion in additional infrastructure investments funded by a mix of deficits, user fees, and other tax provisions. This proposal would increase output in 2050 by 0.1 percent.
Effects of President Biden’s Unauthorized Immigrant Legalization Proposal on SNAP and Payroll Tax
PWBM projects that the legalization provisions of the U.S. Citizenship Act proposed by President Biden would increase per capita spending on the Supplemental Nutrition Assistance Program (SNAP) by 1.2 percent in 2031 and 0.7 percent 2050 relative to the current policy baseline. Per capita payroll taxes would increase by 1.3 and 0.2 percent relative to the current policy baseline, in 2031 and 2050 respectively.
Explainer: Capital Crowd Out Effects of Government Debt
Government spending redirects real resources in the economy and can crowd out private capital formation. An additional $1 trillion debt this year could decrease GDP by as much as 0.28 percent in 2050.
Explainer: Economic Effects of Infrastructure Investment
Public infrastructure investment boosts the productivity of private capital and labor, leading to higher output, but this positive effect can be offset if the investment is financed with additional government borrowing. PWBM estimates that an illustrative 10-year, $2 trillion public investment plan will raise public capital by 4.6 percent but lower private capital by 0.8 percent in 2040, with a net zero effect on GDP in 2040.
Republican and Bipartisan Infrastructure Proposals: Budget and Economic Effects
We estimate that Sen. Capito’s $330 billion infrastructure package, funded by user fees over 8 years, would increase GDP by about 0.05 percent in 2050. A $579 billion infrastructure investment being considered by a bipartisan group of senators, would increase output in 2050 by 0.1 percent if funded by user fees or have roughly zero net effect on GDP if deficit financed.
COVID-19 School Closures: Long-run Macroeconomic effects
PWBM estimates that the learning loss from school closures reduced GDP by 3.6 percent in 2050. Extending the 2021-22 school year by one month would cost about $75 billion nationally but would limit the reduction in GDP to 3.1 percent. This smaller reduction in GDP produces a net present value gain of $1.2 trillion over the next three decades, equal to about a $16 return for each $1 invested in extending the 2021-22 school year.
President Biden's American Families Plan: Budgetary and Macroeconomic effects
PWBM projects that the American Families Plan (AFP) would spend $2.3 trillion, about $500 billion more than the White House’s estimate, over the 10-year budget window, 2022-2031. We estimate that AFP would raise 1.3 trillion in new tax revenue over the same period. By 2050, the AFP would increase government debt by about 4 percent and decrease GDP by 0.3 percent.
