Tag: government revenue
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Redistribution in Reverse: The Macroeconomics of the OBBB with Addendum on the Senate Version
This amended policy brief evaluates the macroeconomic and distributional implications of both the House-passed and Senate-passed versions of the One Big Beautiful Bill (OBBB). The Senate (and final) version is largely similar to the House bill in structure and priorities. Both preserve the core individual income tax provisions of the 2017 Tax Cuts and Jobs…
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Assessing the Economic Effects of Extending and Increasing the QBI Deduction
The 2017 Tax Cuts and Jobs Act (TCJA) introduced a tax deduction of 20% of qualified business income (QBI) for pass-through businesses. This provision is set to expire at the end of 2025, but Republican lawmakers have proposed both extending it and increasing the deduction to 23%. This brief describes IMPA’s evaluation of the proposal.…
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Preliminary Estimates of the Macroeconomic Costs of Cutting Federal Funding for Scientific Research
Federal agencies such as NIH and NSF are critical sources of funding for basic and applied scientific research. Recently, many of these agencies have seen their research operations frozen or downsized. This brief describes a new analysis of the macroeconomic costs of cutting federal funding for scientific R&D. The brief finds that budget cuts to…
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Technical Note on the Economics of Taxing Capital Gains
This technical note describes how, under the current system of capital gains taxation, capital gain income is taxed at lower rates than labor income—and only upon realization of the gains and with a step-up in basis at death. This system distorts the economy and contributes to inequality. Lower tax rates on capital gains income do…
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Taxing Excessive Profits: Designing a Pro-Competition Corporate Tax System
This brief, authored by Ira Regmi and Niko Lusiani, lays the groundwork for a pro-competition corporate income tax system, emphasizing the economic rationale for taxing the excess profits of large U.S. businesses. A preliminary draft was shared to kick off the IMPA-RI co-organized expert convening at American University in October 2024
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Assessing the Effects of a Dividend and Capital Gains Tax Increase
This brief provides a new analysis of the macroeconomic effects of raising taxes on dividend income and capital gains. Increasing dividend income and capital gains taxes from 20% to 39.6% for households earning over $1 million would raise government revenue by about 5% and GDP by about 1% in the long term. The proposed tax increase…
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New Macroeconomic Model Shows TCJA Corporate Tax Cut was Harmful to the Economy in both Aggregate and Distributional Terms
This brief explains IMPA’s analysis of the corporate tax cuts in the Tax Cuts and Jobs Act (TCJA). IMPA’s analysis accurately predicts the growth in investment, output, jobs, and wages that followed its enactment. This paper builds on the work from IMPA’s series on corporate tax policy. Check our publications page for the latest reports and analysis from IMPA.…