Furman makes the point that the corporate rate cut is only half reversed. True. But the rate is being raised on a broader base b/c of TCJA... which cut taxes on corps by ~$330bn over a decade. Biden's 3 biggest provisions will raise corp taxes by *$1.5 trillion*
On the assertion that the growth effex of the tax plan are negligible: These are both high quality models but a shortcoming is that they are mostly driven by crowding out effects - which isnt relevant right now. And b/c the plan is scored in isolation as deficit reduction...
Good news: using a new(ish) measure of the labor share that Rognlie deems "the best measure," pay and productivity are growing together.
Bad news: there's a much bigger puzzle than supposed decline of the labor share
In an overlooked comment here ( mattrognlie.com/kn_comment_rog… ) Rognlie reviews common biases in measuring labor share and comes up with a preferred measure that addresses them: "the net labor share of domestic corporate factor income"
I take his definition and update it (using the nonfinancial corporate sector - more on that later). It has hovered between 74% and 84% since 1947 and now sits above historical average at 80%. In Rognlie's words "there is no postwar trend in the net corporate labor share"