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

67 Pages Posted: 26 Oct 2020

See all articles by Timothy Fitzgerald

Timothy Fitzgerald

Texas Tech University; Independent

Kevin Hassett

affiliation not provided to SSRN

Cody Kallen

University of Wisconsin - Madison

Casey B. Mulligan

University of Chicago; National Bureau of Economic Research (NBER)

Date Written: October 21, 2020

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.

Suggested Citation

Fitzgerald, Tim and Hassett, Kevin and Kallen, Cody and Mulligan, Casey B., An Analysis of Vice President Biden's Economic Agenda: The Long Run Impacts of its Regulation, Taxes, and Spending (October 21, 2020). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2020-157, Available at SSRN: https://ssrn.com/abstract=3717041 or http://dx.doi.org/10.2139/ssrn.3717041

Tim Fitzgerald

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

Independent ( email )

Kevin Hassett

affiliation not provided to SSRN

Cody Kallen

University of Wisconsin - Madison ( email )

716 Langdon Street
Madison, WI 53706-1481
United States

Casey B. Mulligan (Contact Author)

University of Chicago ( email )

1126 East 59th Street
Chicago, IL 60637
United States
773-702-9017 (Phone)
773-702-8490 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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