Reports

Dynamic Analysis of Corporate Income Tax Rate Cut

29 November 2017

Abstract

This Quantitative Note uses the OG-USA open source dynamic general equilibrium overlap- ping generations model to simulate the effect of cutting the U.S. corporate income tax rate from 35% to 20%. I simulate this rate cut under the assumptions of a closed economy and small open economy, respectively. In both cases, the corporate rate cut causes government revenues to decrease and the debt-to-GDP ratio to increase. In the small open economy scenario, GDP and wages increase by around 3.0%, and 2.5%, respectively. However, in the closed economy setting in which the increased debt service must be satisfied by domestic savings (crowding out), the GDP and wage gains are much smaller and short lived.

Bio

Richard Evans is a Senior Lecturer at the University of Chicago M.A. Program in Computational Social Science, Director of the Open Source Macroeconomics Laboratory (OSM Lab) at the University of Chicago, a Fellow with the Becker Friedman Institute at the University of Chicago, and an economist with the Open Source Policy Center (OSPC). Rick is also President of Open Research Group, Inc. (OpenRG). Rick is a core maintainer of the OG-USA open source macroeconomic model for dynamic tax analysis. His research focuses on macroeconomics, fiscal policy, and computational modeling.

Quantitative Notes is published by the Open Research Group. For more QNs or to arrange meetings with an expert, please contact experts@openrg.com

Government Revenue and Distributional Effects of Tax Cuts and Jobs Act

29 November 2017

Abstract

We simulate the effects of the Tax Cuts and Jobs Act (TCJA) using the Tax-Calculator open source microsimulation model. Our simulation predicts that the TCJA will reduce government revenues by nearly $460 billion over the next 10 years without factoring in the additional lost revenue from cutting the corporate income tax rate, reducing the estate tax, and removing the individual mandate provision of the Affordable Care Act. We also describe the effects of the TCJA on the distribution of tax filers.

Bios

Richard Evans is a Senior Lecturer at the University of Chicago M.A. Program in Computational Social Science, Director of the Open Source Macroeconomics Laboratory (OSM Lab) at the University of Chicago, a Fellow with the Becker Friedman Institute at the University of Chicago, and an economist with the Open Source Policy Center (OSPC). Rick is also President of Open Research Group, Inc. (OpenRG). Rick is a core maintainer of the OG-USA open source macroeconomic model for dynamic tax analysis. His research focuses on macroeconomics, fiscal policy, and computational modeling.

Haylee Ham is a second-year student in the M.A. Program in Computational Social Science at the University of Chicago and is a student researcher in the Open Source Macroeconomics Laboratory (OSM Lab) at the University of Chicago. Haylee’s research focuses on immigration and demographic dynamics, and she is skilled in data science and data visualization.

TCJA_taxcalc
Quantitative Notes is published by the Open Research Group. For more QNs or to arrange meetings with an expert, please contact experts@openrg.com

Estimating the Effects of Business Tax Reform on Output

29 November 2017

Abstract

Tax policy can have strong effects on the incentives to invest. This note describes a simple approach to approximate the effects of tax policy on investment and output using open source data and models.

Bio

Jason DeBacker is an assistant professor of economics at the University of South Carolina, an economist with the Open Source Policy Center, and he was formerly a financial economist in the Treasury’s Office of Tax Analysis. Jason is a core maintainer of the open source models B-Tax and OG-USA, which model business taxes and macroeconomic effects of tax policy, respectively. His research focuses on tax policy and firm dynamics.

CCC_Output_QN
Quantitative Notes is published by the Open Research Group. For more QNs or to arrange meetings with an expert, please contact experts@openrg.com

Business Tax Reform and the Retail Industry

18 September 2017

Abstract

Business tax reform, which has loomed on the horizon for more than a decade, may finally have its chance. In this Quantitative Note, I explore the consequences of two business tax reform concepts on incentives to invest among C-corporations in the retail industry: a cash flow tax and a corporate income tax system with reduced rates.

Bio

Jason DeBacker is an assistant professor of economics at the University of South Carolina, an economist with the Open Source Policy Center, and he was formerly a financial economist in the Treasury’s Office of Tax Analysis. Jason is a core maintainer of the open source models B-Tax and OG-USA, which model business taxes and macroeconomic effects of tax policy, respectively. His research focuses on tax policy and firm dynamics.

Retail_QN_091817
Quantitative Notes is published by the Open Research Group. For more QNs or to arrange meetings with an expert, please contact experts@openrg.com