We explain how the PWBM uses its dynamic Overlapping Generation (OLG) model to analyze tax policies affecting foreign-earned income by affiliates of U.S.-domiciled firms. We evaluate two illustrative policy changes: we show how firms’ tax liabilities and the allocation of capital between domestic and international production are affected by an increase in foreign tax rates and a decrease in U.S. tax exemptions on foreign-derived income.
The COVID-19 pandemic caused major disruptions to U.S. immigration. Policymakers imposed travel restrictions, stopped visa processing, and made significant changes at the border. The pandemic and policy response led to more employment-based immigration and increased illegal border crossings instead of reducing them.
We examine two major investment tax incentives for the computer sector. The impact on computer-sector investment as well as economy-wide investment is very small, even when the computer sector is modeled as a production complement.
After Ireland ended the Double Irish tax planning strategy in 2020, US firms with historical links to Ireland have shifted their intellectual property (IP) away from traditional tax havens to Ireland and the US to take advantage of tax incentives offered by both countries. This has coincided with a significant increase in Irish corporate tax revenue, particularly for less capital-intensive firms. Repatriation of foreign earnings to the United States has also increased, but fiscal benefits to the US have been offset by tax incentives passed under TCJA.
Improvements in U.S. life expectancy stalled in the 2010s, years before the COVID-19 pandemic produced a spike in mortality. We present new estimates of historical patterns in mortality by socio-demographic group and projections of U.S. mortality through 2060.
The impact of income-driven repayment (IDR) educational financing plans by income, race, and gender is not generally well understood. Our analysis estimates that approximately 43 percent of the subsidies from President Biden’s Saving on a Valuable Education (SAVE) plan will accrue to current Black student borrowers and 71 percent to current female borrowers. While lower- to middle-income student borrowers stand to gain the most, we estimate that about a fifth of the benefits will go to households in the top 20 percent of the income distribution, and borrowers with graduate-level education who benefit from the SAVE plan tend to experience the highest savings on average.
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We analyze a new illustrative policy to create automatic retirement savings accounts for more than 56 million low-income Americans by 2030. The program is fully financed by removing the gross income adjustment for traditional 401k and similar retirement accounts without any additional contribution from households or employers. The program relies on the existing EITC administration without employer participation. After accounting for risk, individual account balances reach over $200,000 by retirement and any balances can be bequeathed upon death.
PWBM estimates that President Biden’s FY2025 budget proposal would reduce primary deficits by $1.7 trillion over the 2025-2034 budget window. Accounting for economic feedback effects, GDP falls by 0.8 percent relative to current law in 2034. By 2054, debt falls by 5.4 percent and GDP declines by 1.3 percent relative to current law.
