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.
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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%.
550,000 Workers Lose Status by End of 2025: Potential Impact by State and Industry
Over 700,000 Temporary Protected Status (TPS) recipients lose legal status by the end of 2025, including 550,000 who are legally working. We estimate that TPS recipients contribute over $36 billion in annual GDP. Withdrawing their work authorization could add to labor shortages in construction, cleaning, and hospitality, especially in Florida, Texas and New York.
OBBBA International Tax Reforms: Updated Cost Estimates
We project that corporate tax revenue will decrease by $276 billion over 10 years on a conventional basis due to changes in international tax provisions related to the Section 250 deduction under OBBBA.
The Long-Term Outlook for Social Security: Baseline and Alternative Assumptions
The current Social Security program faces a significant shortfall, equal to 4.2 percent of all future covered payroll over the next 75 years. This shortfall persists under alternative and favorable projections of fertility, interest rates, immigration and the projected impact of AI on future wages.
The Cost of the Employee Retention Tax Credit
PWBM estimates that the COVID-era Employee Retention Credit (ERC) will have cost more than $300 billion when the IRS finishes processing claims later in 2025, nearly four times the initial projected cost. Most of the ERC was paid retroactively, well after pandemic-related economic disruptions had ended, limiting its effectiveness as a worker retention incentive.
The Projected Impact of Generative AI on Future Productivity Growth
We estimate that AI will increase productivity and GDP by 1.5% by 2035, nearly 3% by 2055, and 3.7% by 2075. AI’s boost to annual productivity growth is strongest in the early 2030s but eventually fades, with a permanent effect of less than 0.04 percentage points due to sectoral shifts.
Mass Deportation of Unauthorized Immigrants: Fiscal and Economic Effects
It is well known that mass deportation reduces aggregate economic variables like GDP due to scale effects. We project that deportation also reduces wages of high-skill workers, compromising 63% of workers. Still, authorized low-skilled workers can see their wages increase but only if the deportation policy is permanently sustained after 4 years. Even with new funds provided in the 2025 OBBBA, we estimate that permanent deportation would cost an additional $900 billion over the first 10 years.
Import Surges and Tariff Avoidance: The Short-Term Impact of the Trump Administration’s Trade Policies
We estimate that importers avoided 13.1 percent ($6.5 billion) of new tariffs by accelerating purchases and changing their purchasing patterns in response to the new tariff regime. Importers especially stockpiled pharmaceuticals and precious metals during 2025 Q1.
