reports

Repealing the Clean Energy Credits: A Macroeconomic Assessment of the GOP Proposal

Repealing the Clean Energy Credits – A Macroeconomic Assessment

by Ignacio González, Juan Montecino, and Vasudeva Ramaswamy

This brief explains a new analysis of a Republican proposal to repeal the clean energy credits from the 2022 Inflation Reduction Act. The analysis finds that withdrawal of the clean energy credits would reduce GDP by approximately 2% in the long run from its anticipated level under current policy, while depressing employment and wages by approximately 0.5% and 1.5%, respectively. The proposal to repeal the clean energy credits seeks to reduce the government deficit. The analysis shows that an alternate policy of retaining the clean energy credits, while also raising the headline corporate tax rate to 28%, simultaneously raises government revenue, promotes economic growth, and alleviates wealth and income inequality.

reports

New Macroeconomic Model Shows TCJA Corporate Tax Cut was Harmful to the Economy in both Aggregate and Distributional Terms

New Macroeconomic Model Shows TCJA Corporate Tax Cut was Harmful to the Economy in both Aggregate and Distributional Terms
by Lídia Brun, Ignacio González, and Juan Antonio Montecino

This brief explains IMPA’s new analysis of the corporate tax cuts in the Tax Cuts and Jobs Act (TCJA), showing that the IMPA model would have outperformed existing models in analyzing TCJA by correctly predicting the anemic growth in investment, output, jobs, and wages that followed its enactment.