Effects of a Border-adjusted Corporate Tax

U.S. firms pay the world’s highest corporate tax rate — a federal tax of 39.1 percent combined with an average 4.1 percent state tax on profits from domestic sales, or foreign sales (when and if the profits are repatriated). In contrast, the lower tax rate embedded in the prices of those goods produced in other countries and shipped to the United States often gives them a competitive advantage, whether due to other countries’ lower valueadded taxes (VAT) or much lower corporate tax rates.

Massive Growth & New Fiscal Imbalances

President Trump’s proposed tax plan will create 3,000,000 new jobs and 5 percent economic growth in the first year alone. But the tax cuts and proposed additional spending will translate to large future fiscal imbalances for taxpayers in the coming years, according to an analysis from the NCPA.

The Economic Effects of Repealing the Affordable Care Act

The Congressional Budget Office (CBO) recently analyzed the effect of repealing and replacing the Affordable Care Act on federal revenues and the uninsured. There was much hype about their conclusions that 24 million people would be added to the ranks of the uninsured (although about 14 million of those would choose not to buy insurance because they would no longer be forced to). Also, federal deficits would fall by $337 billion over 10 years. However, the CBO did not measure the economic effects of repealing some of the most burdensome aspects of Obamacare, which would create hundreds of thousands of jobs and increase Americans’ personal incomes.

The Economic Effects of the Clinton Tax Proposal

Taxes impinge on individual and business decisions to work, save and invest. Using a dynamic computable general equilibrium model that we created for the National Center for Policy Analysis (the “NCPA-DCGE Model”), we simulate the effects on the U.S. economy of the tax proposal advanced by presidential candidate Hillary Clinton. The plan will generate $615 billion in tax revenue over 10 years. It will exert moderate negative impacts on output, investment, overall employment and household well-being. We briefly compare our findings with other published estimates and contrast the methodology underlying our model with that of other models.