Note: This document was updated on 5/30/2024 to include a discussion of how much of the policy would be paid for by economic feedback effects.
Note: This document was updated on 5/21/2024 to include a conventional distributional analysis and a dynamic distributional analysis of the three policy bundles.
We estimate federal spending and taxes by birth-year, gender, race, and education, by interacting official budget totals with microsimulation demographics to project federal budget imbalances. Future federal spending exceeds tax receipts under current policy. The federal Fiscal Imbalance totals $162.6 trillion in present value, six-fold larger than outstanding debt held by the public. Restoring fiscal balance would require immediately and permanently either raising all federal taxes by 26.1 percent or reducing all federal spending by 33.4 percent, or some combination of the two. Holding harmless some population groups from changes, including people over age 59, increases the required adjustment rate.
We examine recent trends in the activities of US multinationals and their foreign affiliates using data from the Bureau of Economic Analysisâs annual survey of US direct investment abroad. Since the passage of the Tax Cuts and Jobs Act (TCJA), multinational activity has become more domestically concentrated, continuing a trend that started before the legislation. This has coincided with a decline in the US effective corporate tax rate and relatively stable foreign effective tax rates.
We estimate that President Bidenâs recently announced âNew Plansâ to provide relief to student borrowers will cost $84 billion, in addition to the $475 billion that we previously estimated for President Bidenâs SAVE plan. Moreover, some debt relief in the New Plans accrues to borrowers in households with income more than the SAVE plan coverage.
U.S. population growth is projected to decline, and the population will become much older over time. Preventing these outcomes will require faster immigration by several multiples of its current rate.
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PWBM estimates that the Wyden-Smith tax proposal ( H.R. 7024 ) would reduce revenues by $3 billion over the next decade on a conventional basis.
PWBM estimates that exempting from immigrants with advanced STEM degrees from numerical limitations on green cards would reduce deficits by $129 billion over the 2025-2034 period and by $634 billion over the 2035-2044 period.
