Thread by @jasonfurman

In my oped in @WSJopinion arguing for the Biden tax plan--and the investments it pays for--I cited seven studies about its impact on the economy. One tweet for each study--plus a bonus tweet in this thread.

The @BudgetModel finds the tax+immigration plan would increase the GDP level by 1.5% in 2050 (rounds to 0.1pp higher annual growth rate).

They do not estimate taxes only but based on other work the effect on growth is close to zero and wages is positive. budgetmodel.wharton.upenn.edu/issues/2020/9/…

@AEI co-authored by @kpomerleau found ~0 effect: "Biden’s proposals would reduce GDP by 0.06 percent over the next decade, slightly increase GDP the second decade (0.07 percent), and result in a small reduction in GDP in the long run (0.2 percent)." aei.org/research-produ…

The @TaxFoundation numbers are larger (they usually are) but even they find only a 1.47% reduction in the "long run". Assuming that happened by 2050 that would fall just short of rounding up to 0.1pp off the annual growth rate through 2050. taxfoundation.org/joe-biden-tax-…

The models are different but are generally finding small effects because some changes are offsetting (e.g., higher rates increase the value of expensing and interest deductions, also in the @BudgetModel closing overseas tax loopholes increases in domestic investment.

The small effects are important because it means the "tanks the economy" argument is a bogeyman so you should judge the plans based on your values (is it fair for high-income to pay more?) & also on the impact of what it is paying for on growth and directly for families.

Coherent to say it is unfair to take this much away from successful people that earned it. Is not my view--especially after the large increase in inequality over the last 3 decades.

Less coherent to say it would kill growth/jobs, be creeping socialism or hurt the middle class.

The short-run growth effect of the full Biden agenda is almost unambiguously positive because whatever fiscal stimulus Biden did would be both 10 to 20 times as large as the tax increases and have more bang for the buck.

Goldman Sachs (gated) examines the shorter-run effects & finds more than 1pp add to the annual growth rate in the 1st few years, they note is larger than the effect of the TCJA. (Confusingly their increased output gap is actually more growth not less.) marquee.gs.com/content/resear…

Oxford Economics has a similar finding, expecting that even a partial version of the Biden plans would "provide the US economy with a booster shot as it recovers from the Global Coronavirus Recession... boost GDP growth by 2.1ppts to 5.8% in 2021." f.hubspotusercontent10.net/hubfs/2240363/…

Finally, Mark Zandi and Bernard Faros from @economics_ma attempt to incorporate effects like the positive impact of the caregiver proposal on long-run labor supply and find it expands the level of GDP by 5% in 2030 relative to a Republican sweep. moodysanalytics.com/-/media/articl…

Coherent to say it is unfair to take this much away from successful people that earned it. Is not my view--especially after the large increase in inequality over the last 3 decades.

Less coherent to say it would kill growth/jobs, be creeping socialism or hurt the middle class.

My own values: it is most important is to judge the plan based on what it does directly for people, like money for children, healthcare and caregiving. On this the Biden plan does extremely well--and any extra growth is like a cherry on top.