Lawmakers Should Keep “Transferability” of IRA Credits Intact

"One IRA provision [the Republicans] may have set their sights on is called “transferability.” Repealing this policy would be a mistake."

9/9

www.aei.org/economics/la...

Should Lawmakers Raise the Stock Buyback Excise Tax?

"Lawmakers are right to want to limit the cost of extending the TCJA. Increasing the excise tax on stock buybacks could raise needed revenue but would have notable downsides that need consideration."

8/

www.aei.org/economics/sh...

Export Subsidies Won’t Reduce the Trade Deficit Either

"Lawmakers should be less focused on the trade deficit, but if lawmakers do want to reduce it, they should focus on policies that actually affect it."

7/

www.aei.org/economics/ex...

Tariffs will Make It More Expensive to Invest in America

"...tariffs apply to capital goods like machinery and equipment used by businesses. This means that tariffs, unlike consumption taxes, can penalize investment.

6/

www.aei.org/economics/ta...

Tariffs Cause Short-Term and Long-Term Economic Pain

"The administration and its supporters argue that the market reaction is only temporary and that the tariffs will only result in short-term “pain,” but the economy would benefit in the long run. They are wrong."

5/

www.aei.org/economics/ta...

Getting Business or “C” SALT Right

"Lawmakers are currently considering a limitation on the business deduction for state and local taxes paid (C-SALT)...There is a case for some limitation."

4/

www.aei.org/economics/ge...

A Preferential Corporate Tax Rate for Manufacturing Would Be Bad Policy

"It’s not clear why the tax code should prioritize manufacturing, but if lawmakers do, they would be wise to avoid special lower tax rates and consider, instead, accelerated depreciation."

3/

www.aei.org/economics/a-...

Four Things to Know About Border Adjustments

"Border adjustments are a broadly misunderstood policy... basing US tariffs on foreign VATs would make a bad policy even worse."

2/

www.aei.org/economics/fo...

Clean-ish because they dont have the time to make big changes (while negotiating everything else), they will need to add SALT changes and other Trump proposals (tips).

Although a border adjustment was proposed alongside a cash flow tax in '16, it need not be attached to any specific tax to be trade neutral.

Preston, here, is proposing a 7% border adjustment.

It is interesting to think through the differences.

To get from a tariff on some goods to a border adjustment would require applying the tax to not only all goods, but all services. Then it would require a subsidy on all exports.

Two "neat" things about paper:

1. We estimated the magnitude of these distortions from 1960 to present. Things have generally improved over time due, primarily, to lower statutory tax rates

2. We discuss how either income or consumption tax reforms could further improve things.