NOTE: This is a corrected version of the analysis originally published October 29, 2020.
The Tax Policy Center (TPC) has analyzed the macroeconomic effects of former vice president Joe Biden’s tax proposals. We find the tax proposals would boost US gross domestic product (GDP) 0.2 percent in 2021, reduce GDP 0.3 percent in 2030, and increase GDP by small but rising amounts by 2040 and beyond. The resulting net decrease in economic output over the first decade would reduce the net revenue generated from the proposals by $161 billion from 2021 to 2030 (around 8 percent of the 10-year total). In the following decade, macroeconomic feedback on output would reduce the net revenue increase by $90 billion. Biden’s spending proposals would also have important effects on the overall economy, but TPC has not estimated those.