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

Author

Listed:
  • Timothy Fitzgerald

    (Texas Tech University - Rawls College of Business)

  • Kevin Hassett

    (The Lindsey Group; The Hoover Institution)

  • Cody Kallen

    (University of Wisconsin-Madison - Wisconsin School of Business)

  • Casey B. Mulligan

    (University of Chicago - Department of Economics; The Committee to Unleash Prosperity; NBER)

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

  • Timothy Fitzgerald & Kevin Hassett & Cody Kallen & Casey B. Mulligan, 2020. "An Analysis of Vice President Biden's Economic Agenda: The Long Run Impacts of its Regulation, Taxes, and Spending," Working Papers 2020-157, Becker Friedman Institute for Research In Economics.
    • Handle: RePEc:bfi:wpaper:2020-157
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    File URL: https://repec.bfi.uchicago.edu/RePEc/pdfs/BFI_WP_2020157.pdf
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    References listed on IDEAS

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    Cited by:

    1. Michael D. Bordo & Mickey D. Levy, 2020. "Do Enlarged Fiscal Deficits Cause Inflation: The Historical Record," NBER Working Papers 28195, National Bureau of Economic Research, Inc.
    2. Philipp Hauber & Stormy-Annika Mildner & Galina Kolev & Jürgen Matthes & Sonja Peterson & Reimund Schwarze & Christiane Lemke & Martin, Thunert & Laura von Daniels & Josef Braml & Johannes Varwick & D, 2021. "Die USA unter Joe Biden: Kehrtwende oder "America first light"?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 74(01), pages 03-37, January.

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