Senator Elizabeth Warren has proposed a wealth tax equal to 2 percent of net worth above $50 million and 6 percent of net worth above $1 billion, which her campaign estimates would raise $3.75 trillion over 10 years.
PWBM estimates that the proposal would raise about $2.7 trillion over fiscal years 2021-2030, not including macroeconomic effects. Including macroeconomic effects, PWBM estimates that the proposal would raise about $2.3 trillion over the same period.
PWBM projects that the proposal would reduce GDP by 0.9 percent in 2050 under the standard budget scoring convention that additional revenues reduce the deficit. If the revenues were instead spent on public investments, PWBM projects GDP in 2050 would fall between 1.0 and 2.1 percent, depending on the productivity of the investment. Average hourly wages in the economy in 2050, including wages earned by households not directly subject to the wealth tax, would fall between 0.8 and 2.3 percent due to the reduction in private capital formation.
We estimate the budgetary and economic effects of increasing the top rate on long-term capital gains and qualified dividends from 20 percent to 24.2 percent, which is enacted on January 1st, 2021. We project that it will raise around $60 billion of additional revenue on a conventional basis over the 10-year budget window and increase GDP by 0.1 percent by 2050.
We estimate the budgetary and economic effects of a new broad-based 1 percent value-added tax (VAT) with a progressive universal rebate calculated based on earnings, which is enacted on January 1st, 2021. We project that it will raise $700 billion of additional revenue on a conventional basis over the 10-year budget window and increase GDP by 0.8 percent by 2050.
We estimate the budgetary and economic effects of a new carbon tax of $30 per ton of emissions, which is enacted on January 1st, 2021, rising by inflation plus 5 percent through 2050. We project that it raises $1.6 trillion of additional revenue on a conventional basis over the 10-year budget window and increases GDP by 2.2 percent by 2050.
The COVID-19 spike in mortality is the pandemic’s most direct demographic consequence, but not the only one. Factoring in changes in fertility, disruptions to immigration, and indirect demographic spillovers, we estimate that the pandemic reduced the U.S. population 0.5 percent over the long term.
The COVID-19 pandemic led to a decline in births in 2020 followed by a rebound in 2021. We present new estimates of “excess” births during the pandemic, which show that on net over the two-year period, births were roughly in line with pre-pandemic trends.
The COVID-19 pandemic caused major disruptions to U.S. immigration. Policymakers imposed travel restrictions, stopped visa processing, and made significant changes at the border. The pandemic and policy response led to more employment-based immigration and increased illegal border crossings instead of reducing them.
Improvements in U.S. life expectancy stalled in the 2010s, years before the COVID-19 pandemic produced a spike in mortality. We present new estimates of historical patterns in mortality by socio-demographic group and projections of U.S. mortality through 2060.
U.S. population growth is projected to decline, and the population will become much older over time. Preventing these outcomes will require faster immigration by several multiples of its current rate.
The economic costs of the COVID-19 pandemic were widely expected to fall disproportionally on women. Instead, the employment rate of prime age women recovered faster than men’s and rose to its highest point in U.S. history in 2023. We show that the resilience of women’s employment is driven by two long-term trends that predate the pandemic and continued through it: 1) the growing share of women who are college graduates, and 2) the rising labor force participation of college-educated mothers with young children.
We estimate that the federal estate tax would have generated 9 times more revenue in 2019 without the tax changes in 2001 and 2017.
We relate the decline in the birth rate to two demographic factors closely associated with women’s fertility patterns: marriage and educational attainment. Married women are at least three percentage points more likely to have a child than unmarried women, and simultaneously marriage rates among women 25 to 29 declined 15.9 percent since 2006. Women who complete 4 years of college are less likely to have a child, while completion rates of 4 years of college rose 10 percent for women over the past decade.
The U.S. population’s total fertility rate is now approximately 1.7 births per female, which is below the replacement rate of 2.1 that is required for the U.S. population not to shrink without increases in immigration. Women are delaying motherhood, from the 2006 average age range of 25 to 29 to the 30 to 34 age range today.
In 2018 and 2019, age-specific mortality rates for ages 60 through 80 continued to decline by 0.5 percent annually. For the same age group, age-specific mortality increased for those without a high school diploma but decreased 2.5 percent for those with a BA or advanced degrees.
Authors: Efraim Berkovich, Daniela Costa, and Austin Herrick
We estimate that White households inherit over 5.3 times as much as Black households and 6.4 times as much as Hispanic households. White households are 2.8 times more likely than Black households to inherit any wealth. Differences in inheritances reflect and may contribute to wealth differences by race.
Households in the top 5 percent of the income distribution receive inheritances between 4 to 12 times larger than households in the bottom 80 percent, depending on the exact definition of inheritance used.
PWBM projects that the legalization provisions of the U.S. Citizenship Act proposed by President Biden would increase per capita spending on the Supplemental Nutrition Assistance Program (SNAP) by 1.2 percent in 2030 and 0.8 percent 2050 relative to the current policy baseline. Per capita payroll taxes would decrease by 0.1 percent relative to the current policy baseline.
PWBM projects that by 2050, the legalization provisions of the U.S. Citizenship Act proposed by President Biden would increase the size of the U.S. population by 4.21 percent, increase GDP by 0.5 percent, but decrease GDP per capita by 0.2 percent. More specific legalization proposals targeted at farm workers, DACA recipients, and essential workers would each increase GDP per capita by 0.1 percent in 2050.
Additional education is associated with similar reductions in mortality rates for men and women—in 2016, for example, men and women with high school degrees had mortality rates 16 percent and 14 percent lower, respectively, than those without degrees. That same year, however, the mortality advantage of completing a high school degree was 18 percentage points higher for White people than for Black people.
Over the last two decades, a mortality gap has opened up across education levels. For those born after 1950, each additional level of educational attainment is associated with at least an 18 percent lower mortality rate.
In a previous post, we presented some of the demographic, income, and geographic characteristics of leisure and hospitality workers, who have been disproportionately harmed by the economic impact of the pandemic. We expand on that analysis here with other characteristics that might be important for policy, showing that leisure and hospitality workers tend to live in cities and are more likely to rent, rather than own their homes.
The economic downturn due to coronavirus has disproportionately harmed workers in the leisure and hospitality businesses, such as restaurants and bars—these workers tend to be less-educated and lower-income.
Yahoo Finance editor Adriana Belmonte reports on the effects of increasing immigration on the American workforce. Belmonte cites PWBM’s interview on Knowledge@Wharton Business Radio SiriusXM 132, along with a policy brief written by Georgetown University professor Harry Holzer and the U.S. Census data, to illustrate the effects of increasing immigration on the U.S. economy. She refers to PWBM to demonstrate that increased immigration can lead to a rise in GDP.
