Jobs for America: Investments and policies for economic growth and competitiveness
January 2010
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Jobs for America: Tax and Economic Policy Simulation Summary
| Corporate income tax policy simulation:
Reduce U.S. corporate income tax levels to match the current average of OECD countries (22 percent versus the current 35 percent in the U.S.) |
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- Real GDP growth improves by 0.3 percentage point on an annual basis from 2011 to 2013, an average of 0.2 percentage point from 2014 through 2017, and 0.1 percentage point in 2018 and 2019, relative to a baseline projection without a change in tax policy.
- Real GDP is $375.5 billion, or 2.2 percent, above the baseline projection in 2019.
- Exports respond to the lower corporate tax rate. By 2019, real exports stand at $233.3 billion, or 7.8 percent, above the baseline projection.
- Real business fixed investment jumps 4.6 percent, or $102.4 billion, above the baseline scenario in 2019.
- Industrial production in the rate-cut scenario exceeds the baseline by 3.9 percent in 2019, while total employment increases by 2.13 million (1.4 percent) and manufacturing employment rises by 350,000 (2.7 percent).
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| R&D tax credit permanent and increased by 25 percent policy simulation |
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Impact on real GDP
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Impact on employment
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- Real GDP growth improves by 0.2 percentage point on an annual basis from 2011 to 2013, and by 0.1 percentage point after 2013, relative to a baseline projection without a change in policy.
- After 10 years, real GDP is $206.3 billion, or 1.2 percent, above the baseline projection in 2019.
- Real business fixed investment rises 4.8 percent, or $107.3 billion, above the baseline scenario in 2019.
- Exports, especially technology-related goods and services, experience higher growth. By 2019, real exports stand at $63 billion, or 2.1 percent, above the baseline projection.
- Industrial production exceeds the baseline scenario by 4.4 percent in 2019. Total employment rises by 510,000 jobs (0.4 percent) above the baseline at its peak in 2017, and manufacturing employment jumps by 270,000 jobs (2.1 percent) above the baseline in 2019.
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| Modernizing export controls on commercially available technology products policy simulation |
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- Modernizing U.S. export controls would produce higher export growth in the future, particularly in the high-valued-added areas in which the United States excels.
- The most rapid period of export growth (0.2 to 0.3 percentage point on an annual basis) relative to the baseline occurs from 2011 to 2016, based on a 2010 implementation. After that, export growth relative to that in the baseline moderates to 0.1 percentage point annually. Real exports are $56.6 billion (1.9 percent) higher than the baseline in 2019.
- Real GDP rises by $64.2 billion (0.4 percent) relative to the baseline projection in 2019.
- Real business fixed investment grows faster in the adjusted export control scenario than in the baseline scenario over the next decade. It stands $18.7 billion (0.8 percent) above the baseline in 2019.
- Industrial production exceeds the baseline by 1.5 percent in 2019, while total employment increases by 340,000 jobs (0.2 percent) and manufacturing employment rises by 160,000 jobs (1.2 percent).
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Baseline |
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2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
| Key impacts |
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| Real gross domestic product, US$ billions* |
12,985.5 |
13,276.9 |
13,659.5 |
14,169.2 |
14,574.8 |
14,956.6 |
15,331.1 |
15,708.7 |
16,100.1 |
16,533.3 |
17,017.7 |
| Annual real GDP growth |
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2.2% |
2.9% |
3.7% |
2.9% |
2.6% |
2.5% |
2.5% |
2.5% |
2.7% |
2.9% |
| Real exports of goods & services, US$ billions* |
1,453.7 |
1,557.6 |
1,665.7 |
1,803.3 |
1,961.8 |
2,123.9 |
2,272.3 |
2,429.4 |
2,606.9 |
2,793.5 |
2,988.9 |
| Real gross private fixed nonresidential investment, US$ billions* |
1,294.1 |
1,299.1 |
1,438.2 |
1,640.7 |
1,784.1 |
1,869.4 |
1,922.7 |
1,976.3 |
2,048.3 |
2,133.3 |
2,232.2 |
| Manufacturing employment, millions |
11.99 |
11.54 |
11.71 |
12.16 |
12.58 |
12.80 |
12.81 |
12.72 |
12.66 |
12.64 |
12.58 |
| Total nonfarm employment, millions |
131.89 |
130.65 |
132.92 |
136.33 |
139.07 |
140.95 |
142.35 |
143.60 |
144.80 |
146.09 |
147.57 |
| Civilian unemployment rate |
9.2% |
10.0% |
9.4% |
8.5% |
7.9% |
7.6% |
7.3% |
7.1% |
6.8% |
6.5% |
6.0% |
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| Other results |
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| Industrial production index, 2002=100 |
98.1 |
101.5 |
105.7 |
110.8 |
114.5 |
118.0 |
121.2 |
124.5 |
128.0 |
132.2 |
136.9 |
| FY unified budget balance, US$ billions |
-1,417.1 |
-1,364.0 |
-1,087.5 |
-885.1 |
-696.3 |
-706.6 |
-774.4 |
-794.7 |
-846.2 |
-911.8 |
-998.9 |
* In chained 2005 dollars
Note: Numbers are rounded
Sources: Federal Reserve Bank, Internal
Revenue Service, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor
Statistics, U.S. Treasury, Milken Institute. |
Adjusted corporate income tax
policy simulation |
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2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
| Key impacts |
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| Real gross domestic product, US$ billions* |
12,985.5 |
13,296.7 |
13,722.7 |
14,272.8 |
14,725.9 |
15,148.1 |
15,573.7 |
15,990.4 |
16,413.8 |
16,878.9 |
17,393.2 |
| Annual real GDP growth |
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2.4% |
3.2% |
4.0% |
3.2% |
2.9% |
2.8% |
2.7% |
2.6% |
2.8% |
3.0% |
| Real exports of goods & services, US$ billions* |
1,453.7 |
1,565.4 |
1,690.1 |
1,843.9 |
2,020.8 |
2,200.5 |
2,374.2 |
2,558.5 |
2,766.1 |
2,988.4 |
3,222.2 |
| Real gross private fixed nonresidential investment, US$ billions* |
1,294.1 |
1,304.7 |
1,457.0 |
1,670.4 |
1,828.3 |
1,925.2 |
1,992.7 |
2,056.3 |
2,134.6 |
2,227.5 |
2,334.6 |
| Manufacturing employment, millions |
11.99 |
11.54 |
11.76 |
12.28 |
12.75 |
13.00 |
13.04 |
12.98 |
12.94 |
12.95 |
12.93 |
| Total nonfarm employment, millions |
131.89 |
130.73 |
133.30 |
137.02 |
140.12 |
142.27 |
143.96 |
145.43 |
146.76 |
148.15 |
149.70 |
| Civilian unemployment rate |
9.2% |
10.0% |
9.2% |
8.2% |
7.5% |
7.1% |
6.7% |
6.4% |
6.0% |
5.7% |
5.2% |
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| Other results |
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| Industrial production index, 2002=100 |
98.1 |
101.7 |
106.6 |
112.4 |
116.7 |
120.6 |
124.4 |
128.2 |
132.2 |
137.0 |
142.2 |
| FY unified budget balance, US$ billions |
-1,417.1 |
-1,406.1 |
-1,115.5 |
-931.4 |
-718.5 |
-736.1 |
-803.7 |
-822.0 |
-893.0 |
-976.7 |
-1,080.2 |
* In chained 2005 dollars
Note: Numbers are rounded
Sources: Federal Reserve Bank, Internal
Revenue Service, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, U.S. Treasury, Milken Institute. |
R&D tax credit permanent
and increased by 25 percent policy simulation |
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2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
| Key impacts |
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| Real gross domestic product, US$ billions* |
12,985.5 |
13,282.7 |
13,690.3 |
14,232.7 |
14,666.2 |
15,071.4 |
15,465.2 |
15,865.3 |
16,279.0 |
16,727.6 |
17,224.1 |
| Annual real GDP growth |
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2.3% |
3.1% |
4.0% |
3.0% |
2.8% |
2.6% |
2.6% |
2.6% |
2.8% |
3.0% |
| Real exports of goods & services, US$ billions* |
1,453.7 |
1,559.1 |
1,676.9 |
1,827.0 |
1,996.2 |
2,167.3 |
2,323.4 |
2,486.3 |
2,667.7 |
2,856.2 |
3,051.9 |
| Real gross private fixed nonresidential investment, US$ billions* |
1,294.1 |
1,304.4 |
1,458.2 |
1,678.5 |
1,837.2 |
1,935.7 |
2,000.6 |
2,066.7 |
2,152.0 |
2,247.9 |
2,356.8 |
| Manufacturing employment, millions |
11.99 |
11.53 |
11.72 |
12.23 |
12.71 |
12.97 |
13.01 |
12.94 |
12.91 |
12.90 |
12.85 |
| Total nonfarm employment, millions |
131.89 |
130.67 |
133.06 |
136.63 |
139.49 |
141.40 |
142.77 |
144.06 |
145.31 |
146.59 |
148.01 |
| Civilian unemployment rate |
9.2% |
10.0% |
9.4% |
8.4% |
7.8% |
7.5% |
7.2% |
7.0% |
6.8% |
6.5% |
6.1% |
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| Other results |
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| Industrial production index, 2002=100 |
98.1 |
101.5 |
106.3 |
112.3 |
116.9 |
121.0 |
124.8 |
128.7 |
132.9 |
137.7 |
142.9 |
| FY unified budget balance, US$ billions |
-1,417.1 |
-1,363.3 |
-1,080.7 |
-862.0 |
-657.5 |
-659.4 |
-727.0 |
-754.3 |
-812.5 |
-883.6 |
-976.2 |
* In chained 2005 dollars
Note: Numbers are rounded
Sources: Federal Reserve Bank, Internal
Revenue Service, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, U.S. Treasury, Milken Institute. |
Modernizing export controls on
commercially available technology products policy simulation |
| |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
| Key impacts |
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| Real gross domestic product, US$ billions* |
12,985.5 |
13,281.4 |
13,675.3 |
14,194.5 |
14,608.5 |
14,997.1 |
15,377.4 |
15,760.7 |
16,156.6 |
16,593.6 |
17,082.0 |
| Annual real GDP growth |
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2.3% |
3.0% |
3.8% |
2.9% |
2.7% |
2.5% |
2.5% |
2.5% |
2.7% |
2.9% |
| Real exports of goods & services, US$ billions* |
1,453.7 |
1,560.1 |
1,673.9 |
1,816.7 |
1,980.6 |
2,147.9 |
2,301.7 |
2,465.1 |
2,649.0 |
2,842.3 |
3,045.5 |
| Real gross private fixed nonresidential investment, US$ billions* |
1,294.1 |
1,300.8 |
1,445.0 |
1,650.6 |
1,795.9 |
1,882.7 |
1,937.1 |
1,992.0 |
2,065.1 |
2,151.0 |
2,251.0 |
| Manufacturing employment, millions |
11.99 |
11.54 |
11.73 |
12.20 |
12.64 |
12.88 |
12.90 |
12.83 |
12.78 |
12.78 |
12.74 |
| Total nonfarm employment, millions |
131.89 |
130.67 |
133.01 |
136.49 |
139.30 |
141.21 |
142.64 |
143.91 |
145.13 |
146.43 |
147.90 |
| Civilian unemployment rate |
9.2% |
10.0% |
9.4% |
8.4% |
7.8% |
7.5% |
7.2% |
7.0% |
6.7% |
6.4% |
5.9% |
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| Other results |
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| Industrial production index, 2002=100 |
98.1 |
101.5 |
106.0 |
111.4 |
115.3 |
118.9 |
122.3 |
125.8 |
129.6 |
134.0 |
138.9 |
| FY unified budget balance, US$ billions |
-1,417.1 |
-1,363.3 |
-1,082.9 |
-875.2 |
-682.2 |
-690.0 |
-757.7 |
-779.0 |
-830.9 |
-896.4 |
-983.1 |
* In chained 2005 dollars
Note: Numbers are rounded
Sources: Federal Reserve Bank, Internal
Revenue Service, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, U.S. Treasury, Milken Institute. |
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