Abstract
Using the open-source Tax-Calculator (3.0.0) microsimulation model, we estimate that Joe Biden’s proposals would raise federal revenue by $2.8 trillion over the next decade (2021–30). The majority of new federal revenue would come from businesses and corporations ($1.9 trillion). The remaining revenue would come from individual income and payroll tax increases ($616.8 billion) and an increase in estate and gift taxes ($276.4 billion).
In 2021, Biden’s proposals would increase taxes, on average, for the top 5 percent of households and reduce taxes on households in the bottom 95 percent. In 2030, Biden’s proposals would increase taxes, on average, for households at every income level, but tax increases would primarily fall on the top 1 percent of income earners.
Using the open-source OG-USA (0.6.2) model, we estimate that Biden’s proposals would reduce gross domestic product (GDP) by 0.16 percent over the next decade, slightly increase GDP the second decade (0.19 percent), and result in a small reduction in GDP in the long run (0.18 percent).
Citation
@techreport{PomerleauSeiter:2020,
title = {An Analysis of Joe Biden's Tax Proposals, October 2020 Update},
author = {Pomerleau, Kyle and Seiter, Grant M.},
year = {2020},
month = oct,
institution = {American Enterprise Institute},
type = {AEI Report}
}