According to the Tax Foundation’s Taxes and Growth Model, the Tax Cuts and Jobs Act would lead to a 1.7 percent increase in GDP over the long term, 1.5 percent higher wages, an additional 339,000 full-time equivalent jobs, and cost $1.47 trillion on a static basis and by $448 billion on a dynamic basis.
This study demonstrates how Tax Foundation’s TAG model calculates the weighted average METRs for different capital assets in the corporate and noncorporate sectors. The high marginal rates of up to 53 percent in the corporate sector illustrate why there is an urgent need for business tax reform.
This comprehensive overview of the of the Senate Tax Cuts and Jobs Act includes a summary of its details and macroeconomic analysis of how it would impact federal revenue, wages, GDP, and after-tax incomes.
This paper evaluates the arguments for and against “crowding out” and compares these arguments to empirical studies. It discusses the impact of tax changes on the allocation of national income between consumption and saving, and the allocation of saving between private investment and government deficits. It finds that the crowding out argument is largely based on a mistaken assumption about the flexibility and availability of saving and credit for the financing of government deficits and private investment.
This comprehensive overview of the of the House Tax Cuts and Jobs Act includes a summary of its details and macroeconomic analysis of how it would impact federal revenue, wages, GDP, and after-tax incomes.
Recent empirical evidence shows that workers bear upwards of 70 percent of the corporate income tax burden, much more than popular tax models claim, which make errors in how they account for super-normal returns and the openness of our economy.
Instead of making expensing temporary, lawmakers could pursue other ways to speed up cost recovery with permanent economic gains and without drastically reducing revenue. One way to do that is by enacting “depreciation indexing.”
Tax reform should aim to get the tax code out of the way of entrepreneurship by making it simpler, less burdensome, and eliminating its anti-growth biases.
These four Tax Foundation tax plans demonstrate ways in which lawmakers could achieve permanent, pro-growth tax reform while keeping the level of federal revenue and the distribution of the tax burden roughly the same as current law.
The most important thing that Congress and the administration can do to boost economic growth, lift workers’ wages, create jobs, and make the U.S. economy more competitive globally, is reform our business tax system.