CBO’s Model for Estimating the Effect That Federal Taxes Have on Capital Income From New Investment: Working Paper 2022-01

Paul Burnham and Dorian Carloni

No 57429, Working Papers from Congressional Budget Office

Abstract: The Congressional Budget Office has developed a model to estimate the effect that federal taxes have on capital income from new investment; it uses that model to help estimate how changes in tax law would affect the economy. The model follows a well-established analytical framework that involves calculating the difference between the before-tax rate of return required to justify an investment and the after-tax rate of return demanded by savers (that is, individuals purchasing the equity and debt issued by businesses). The calculation of the before-tax rate of return is

JEL-codes: C63 H25 (search for similar items in EconPapers)
Date: 2022-02-09
New Economics Papers: this item is included in nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:cbo:wpaper:57429

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