An Analysis of Vice President Biden's Economic Agenda: The Long Run Impacts of its Regulation, Taxes, and Spending

Timothy Fitzgerald, Kevin Hassett, Cody Kallen () and Casey Mulligan ()
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Cody Kallen: University of Wisconsin-Madison - Wisconsin School of Business
Casey Mulligan: University of Chicago - Department of Economics; The Committee to Unleash Prosperity; NBER

No 2020-157, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: We estimate possible effects of Joe Biden’s tax and regulatory agenda. We find that transportation and electricity will require more inputs to produce the same outputs due to ambitious plans to further cut the nation’s carbon emissions, resulting in one or two percent less total factor productivity nationally. Second, we find that proposed changes to regulation as well as to the ACA increase labor wedges. Third, Biden’s agenda increases average marginal tax rates on capital income. Assuming that the supply of capital is elastic in the long run to its after-tax return and that the substitution effect of wages on labor supply is nontrivial, we conclude that, in the long run, Biden’s full agenda reduces full-time equivalent employment per person by about 3 percent, the capital stock per person by about 15 percent, real GDP per capita by more than 8 percent, and real consumption per household by about 7 percent.

Pages: 65 pages
Date: 2020
New Economics Papers: this item is included in nep-ene and nep-pbe
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Citations: View citations in EconPapers (2)

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