Blog Tax Policy
Gas Tax Holidays: Price and Revenue Effects by State
Projected per-gallon price drops and two-month revenue losses if states suspend gasoline and diesel taxes.
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Social Security Reform with Dynamics
We project that Social Security's Old-Age and Survivors Insurance Trust Fund will deplete in six years (2032). We consider five different reform options that vary in the amount of tax increases and benefit cuts. Traditional policy analysis that dominates federal policymaking often provides very different — even opposite — insights compared to more comprehensive modeling.
Effective Tariff Rates and Revenues (Updated March 16, 2026)
The USITC recently released updated trade and tariff data. We estimate an effective tariff rate (ETR) of 10.3 percent through January 2026. We project that replacing the IEEPA tariffs with a new 10% global tariff rate lowers the ETR to 7.7 percent on a bias-corrected basis appropriate for short-term projections.
Deductions vs. Rate Caps: How Mechanism Shapes the Cost and Targeting of Zero-Bracket Expansion
Two Senate proposals widen the zero tax bracket — Senator Booker's KYPA through a doubled standard deduction (costing $5.1 trillion) and Senator Van Hollen's WATCA through an alternative maximum tax (costing $1.4 trillion) — illustrating how mechanism determines cost, targeting, and distortions.
Working Americans' Tax Cut Act: Revenue and Distributional Effects
Senator Van Hollen's Working Americans' Tax Cut Act would pair a new alternative maximum tax for low- and middle-income filers with a graduated millionaire surtax, increasing federal revenue by $264 billion over a decade, not including economic feedback effects.
The Keep Your Pay Act: Budgetary and Distributional Effects
We estimate that the Keep Your Pay Act proposed by Senator Cory Booker would reduce federal revenues by up to $6.4 trillion over a decade. Households earning $100,000–$200,000 receive the largest tax cuts. Separately, on social media, Senator Booker proposed a top-rate increase that we estimate would offset about $1.4 trillion.
How Strategic Reclassification Can Undercut the New H-1B Lottery Design
We analyze how employers could exploit DHS' new H-1B lottery rules by reclassifying positions into closely related occupations with lower prevailing wages to increase their chance of selection. We find that 61 percent of registrations would achieve a higher wage level through reclassification, undoing 42 percent of the expected compensation increase.
Supreme Court Tariff Ruling: IEEPA Revenue and Potential Refunds
We project that reversing the IEEPA tariffs will generate up to $175 billion in refunds. Unless replaced by another source, future tariff revenue collections will fall by half.
Projected Effects of the New (March 2026) H-1B Visa Lottery
We project that the new DHS H-1B selection rule, going into effect in March 2026, will shift the H-1B visa allocation toward higher-paid and higher-education foreign-born workers, but by less than alternative designs being debated. Based on data from the current random lottery in the last five years, we estimate that the new DHS rule will have no significant impact on wages of U.S.-born workers, including non-college, college-educated, and STEM workers. Any reduction in competition from fewer STEM H-1Bs is offset by a reduction in productivity growth.
Blog Tax Policy
A Lower Cap on the Marginal Tax Benefit of Itemized Deductions
Revenue and distributional effects of lowering the cap on the marginal tax benefit of itemized deductions to 32% or 24%.