Will the OBBBA Tax Cuts Grow the US Economy?
Over the long run, OBBBA’s permanent extension of lower marginal tax rates on work, saving, and investment lays a solid foundation for stronger economic growth.
6 min read
Expert
William McBride
Chief Economist & Stephen J. Entin Fellow in Economics
Dr. William McBride is the Chief Economist & Stephen J. Entin Fellow in Economics at the Tax Foundation, where he oversees major research projects primarily related to reforming the federal tax code, advancing sound tax policy, and improving the federal government’s fiscal outlook.
Dr. McBride has more than ten years of experience analyzing a variety of economic and policy issues. At the Tax Foundation he has served as the Vice President of Federal Tax Policy, leading our efforts to research, model, and reform the U.S. tax code, and as Chief Economist, researching the economics of taxation and guiding the development of the Tax Foundation dynamic scoring model. From 2015 to 2020 he was a manager in the National Economic and Statistics (NES) group at PwC where he worked on a wide array of projects including economic impact analyses, industry surveys, U.S. federal and state tax revenue estimates, and issues related to tax reform at the state, federal, and international levels.
Dr. McBride holds a PhD in economics from George Mason University, where he specialized in macroeconomics and agent-based modeling. His research has been cited by policymakers, quoted by major media outlets, including The Wall Street Journal and The New York Times, and published in scholarly journals, such as the National Tax Journal, Public Budgeting & Finance, and Tax Notes.
Latest Work
How Does the OBBBA Impact Debt, Deficits, and Tax Revenue?
Our modeling indicates the One Big Beautiful Bill Act (OBBBA) will boost economic growth but increase deficits, leading to record high debt in 2028 that rises to 124 percent of GDP by 2034.
7 min read
The Unaffordable Healthcare Subsidies That Led to a Government Shutdown
The fiscal fight that resulted in the current federal government shutdown is, at its core, about the healthcare sector, spiraling healthcare costs, and federal subsidies.
7 min read
Federal Revenue and Distributional Impacts of Limiting the Tax Exclusion for Employer-Sponsored Health Insurance Premiums
Policymakers are considering ways to extend the enhancements made to Affordable Care Act premium tax credits that expire at the end of the year, which could cost $350 billion over the next decade. Any expansion of the credits should be offset by reducing other healthcare subsidies or preferences in the tax code, the largest of which is the exclusion for employer-sponsored health insurance (ESI) premiums, estimated to cost more than $5 trillion over the next decade due to reduced income and payroll tax revenue.
10 min read
Blog
Short FormUnderstanding Debt, Deficits, and Interest
The US national debt is on an unprecedented and unsustainable trajectory that will require ever-greater borrowing and larger interest payments on what is borrowed. These interest payments will, in turn, consume a larger part of the budget, and all Americans will pay the price.
4 min read
Does the G7 Global Minimum Tax “Side-by-Side” Solution Give US Multinationals an Advantage?
Rather than returning to a world of retaliatory tax measures and transatlantic disputes, the OECD should continue to decrease the compliance costs of Pillar Two by simplifying the rules to reduce any possible risk that the US has a compliance cost advantage and working with G7 countries on a side-by-side solution.
6 min read
Blog
Short FormThe Progressivity of the US Tax Code
Since the inception of the modern federal individual income tax in 1913, the US tax code has generally become more progressive, not less. Will the recent tax changes made by the One Big Beautiful Bill Act (OBBBA) alter this?
4 min read
US Effective Tax Rates Remain Highly Progressive, Despite Some Economists’ Claims
Targeting wealth at the top through higher taxes has a certain appeal, but it also comes with a lot of drawbacks, including increased avoidance and reduced incentives to invest.
6 min read
The Good, the Bad, and the Ugly in the One Big Beautiful Bill Act
The One Big Beautiful Bill Act makes many of the individual tax cuts and reforms of the TCJA permanent. It improves upon the TCJA by making expensing for R&D and equipment permanent. However, for the most part, it does not include further structural reforms, and instead introduces many new, narrow tax breaks to the code, adding complexity and raising revenue costs.
7 min read
Budget Reconciliation: Tracking the 2025 Trump Tax Cuts
President Trump signed the One Big Beautiful Bill Act into law on July 4, 2025.
18 min read
Will the Big Beautiful Bill Lead to an Economic Boom or Just Modestly Higher Growth?
Lawmakers are right to be concerned about deficits and economic growth. The best path to address those concerns is to ensure OBBB provides permanent full expensing of capital investment, avoids inefficient tax cuts, and offsets remaining revenue losses by closing tax loopholes and reducing spending.
8 min read
“One Big Beautiful Bill Act” House GOP Tax Plan: Details and Analysis
Our preliminary analysis finds the tax provisions increase long-run GDP by 0.8 percent and reduce federal tax revenue by $4.0 trillion from 2025 through 2034 on a conventional basis before added interest costs.
9 min read
House Tax and Spending Bill Continues Income Tax Carveout for Credit Unions
The House tax and spending bill leaves in place a long-standing provision that exempts credit unions from federal and state income tax, allowing them to compete unfairly with banks and, increasingly, to buy them.
6 min read
Three Corporate Tax Hikes That Would Undermine TCJA’s Improvements to Competitiveness
As lawmakers consider options for budgetary offsets, they should prioritize competitiveness and economic growth, as a heavier corporate tax burden will undermine the core purpose and achievement of the TCJA.
24 min read
Picking the Right Budgetary Offsets Key to Tax Reform Success
In a perilous economic and fiscal environment, with instability created by Trump’s trade war and publicly held debt on track to surpass the highest levels ever recorded within five years, a lot rides on how Republicans navigate tax and spending reforms in reconciliation.
6 min read
House Budget Resolution Aims to Balance Tax Cut and Spending Reduction Goals
The House Budget Committee has released a budget resolution that specifies large reductions in both taxes and spending over the next decade, paving the way to extend the expiring provisions of the Tax Cuts and Jobs Act (TCJA) and potentially cut other taxes.
6 min read
Cleaning Up the Tax Code Could Raise Trillions for Tax Reform
As Republicans look for ways to offset the budgetary cost of extending the expiring provisions of the Tax Cuts and Jobs Act (TCJA) and potentially enacting other tax cuts, the latest estimates indicate several trillion dollars could be raised by reducing tax credits and other preferences in the tax code.
5 min read
The Unsustainable US Debt Course and Impacts of Potential Tax Changes
Given the poor state of the budget process and worsening debt trajectory, lawmakers should move boldly and quickly to address the issue, including via a fiscal commission process. Issues to consider should include reforms to both spending and taxes.
42 min read
CBO and JCT Preview Economic Analysis of Extending TCJA
The analysis provides key insights into how their models work and the sort of outputs we can expect from their models as part of next year’s tax debate.
8 min read
National Tax Literacy Poll: Assessing Taxpayer Knowledge and Perceptions of the US Tax System
Taxes and their broader impact are generally overlooked in American education. Taxes influence earnings, budgets, voting, and decisions on where to live, but do American taxpayers understand the US tax system?
25 min read