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Explaining the Rise in Prime Age Women’s Employment

The economic costs of the COVID-19 pandemic were widely expected to fall disproportionally on women. Instead, the employment rate of prime age women recovered faster than men’s and rose to its highest point in U.S. history in 2023. We show that the resilience of women’s employment is driven by two long-term trends that predate the pandemic and continued through it: 1) the growing share of women who are college graduates, and 2) the rising labor force participation of college-educated mothers with young children.

Explaining the Rise in Prime Age Women’s Employment

Why are Changes to IRS Funding Always Scored as Increasing the Deficit?

The House of Representatives is considering legislation that would rescind $14.3 billion of IRS funding as a budgetary offset for a package that provides aid to Israel. CBO estimates that the decrease in IRS funding alone would reduce revenue by $26.8 billion over 10 years, increasing the deficit by $12.5 billion. Due to scoring conventions, CBO’s projected deficit increase could not be reversed for any future legislation that adds the $14.3 billion in funding back to the IRS.

Why are Changes to IRS Funding Always Scored as Increasing the Deficit?

Pillar Two and the U.S. A Policy Explainer for Navigating the Global Minimum Tax

The OECD expects countries to implement components of Pillar Two, its framework for a global minimum tax, starting in 2024. The US is likely to cede tax rights to foreign jurisdictions if it does not enact new tax law. Pillar Two will likely reshape the nature of tax competition between countries, incentivizing greater use of subsidies and refundable tax credits to counteract higher statutory rates.

Pillar Two and the U.S. A Policy Explainer for Navigating the Global Minimum Tax
Working Paper Tax Policy International

Pillar Two and the U.S.: A Policy Explainer for Navigating the Global Minimum Tax

The OECD expects countries to implement components of Pillar Two, its framework for a global minimum tax, starting in 2024. This paper provides policymakers with a comprehensive resource for navigating the Pillar Two framework. We review key components of Pillar Two and related aspects of US tax policy, including: (i) how the global minimum tax is likely to expose portions of the current US corporate tax base to new foreign taxes; (ii) potential modifications to US tax law that would increase compliance and protect US tax rights; and, (iii) the extent to which Pillar Two is likely to succeed in its policy objectives of reducing corporate profit shifting and international tax competition. The US is likely to cede tax rights to foreign jurisdictions if it does not enact new tax law. Pillar Two will likely reshape the nature of tax competition between countries, incentivizing greater use of subsidies and refundable tax credits to counteract higher statutory rates.

When Does Federal Debt Reach Unsustainable Levels?

PWBM estimates that---even under myopic expectations---financial markets cannot sustain more than the next 20 years of accumulated deficits projected under current U.S. fiscal policy. Forward-looking financial markets are, therefore, effectively betting that future fiscal policy will provide substantial corrective measures ahead of time. If financial markets started to believe otherwise, debt dynamics would “unravel” and become unsustainable much sooner.

When Does Federal Debt Reach Unsustainable Levels?
PDF Brief Brief

Stabilize Federal Debt Economic Growth

This legacy brief is available as a downloadable PDF.

Income-Driven Repayment Plans: Modeling Take-up Rates

Federal student loan borrowers can currently choose between several repayment options. When estimating program costs, government agencies have considered several different behavioral repayment models. We find that the most financially savvy rule – where borrowers select the repayment option that minimizes the present value of their future repayments – best explains current borrower choices among repayment options that exist prior to the new Income-Driven Repayment Plan (IDR) “SAVE” plan to be implemented in July 2024.

Income-Driven Repayment Plans: Modeling Take-up Rates

The Build It in America Act: Budgetary and Macroeconomic Effects of Title I

PWBM estimates that Title I of the Build It in America Act would add $76 billion to the budget deficit over the next decade and reduce deficits by $18 billion during the subsequent second decade. It would temporarily boost business investment and GDP during the next two years while lowering GDP in subsequent years. If lawmakers made the extensions permanent, the budgetary cost would rise to $1.25 trillion over the next two decades and GDP would largely remain unchanged, as the tax incentive effects and debt effects mostly offset.

The Build It in America Act: Budgetary and Macroeconomic Effects of Title I