We are pleased to provide this guest commentary authored by William Gale in his work at the Brookings Institution. Bill is the Arjay and Frances Miller Chair in Federal Economic Policy in the Economic Studies Program at the Brookings Institution, co-director of the Tax Policy Center, and a member of MA’s Board of Advisors. Republicans in the House are proposing sweeping corporate tax reform. Their proposals would effectively repeal the corporate income tax, currently levied at a 35 percent rate, and replace it with a new “destination-based cash-flow tax (DBCFT)” at a 20 percent rate for corporations and 25 percent for unincorporated businesses. The new tax would be border-adjustable – taxing imports and exempting exports. The DBCFT has a lot to offer and it deserves a serious look. But right now, the overall proposal is very poorly understood. Here are 11 things to know. Click here to read the … Continue Reading
On a population-weighted basis, weekday snowfall was 2.3 inches in December, only 0.3 inch below the recent norm. This followed an unusually dry October and November. Unusual snowfall through December is estimated to have added two-tenths to Q4 GDP growth. This is broadly consistent with our latest estimate of 2.2% GDP growth in Q4. A return to baseline GDP in Q1 (following the modest boost in Q4)would imply a 0.2 percentage point subtraction from GDP growth then. Orleans County, Vermont normally gets 23 inches of weekday snowfall in December, but got none this year. The population there, however, is small, so there wasn’t much of a boost to GDP. After adjusting for population, unusually dry conditions were scattered across several counties in the Western United States. Click here for more information.