The little (OK, maybe mid-sized) incremental progressive tax train engine that could (while actually saving fuel):
A legally vetted corporate surtax that targets concentrated legacy ownership and retained earnings.
Btw, no intentional shade cast on bigger engines.
www.taxnotes.com/lr/resolve/t...
E.g., Sanders/Khanna statutory draft ⬇️, there's good recent good research on value of audits. So no surprise if a funded audit provision affected views of evasion.
And for any constitutional skeptics, look at the provision that packs the Supreme Court (that's a joke for law tax profs out there).2/2
OK, maybe the E.Saez/G.Zucman estimate letter for the Sanders wealth tax is a bit pithy for something that raises $4.4T, though have seen (and done) pithier. It's also possible they'll offer more details.
Yet I strongly encourage people considering the estimate to work thru the statutory draft.1/2
Moore blessed expansion of subpart F. The Mandatory Repatriation Tax was less (if at all) about tax avoidance or horizontal equity and more about Hill internals (incl. Byrd & use as a rev closer).
A flexible subpart F a good tool in a progressive toolbox, & also may be distributionally virtuous.1/2
The Moore SC decision encourages repurposing tax code parts to target avoidance by legacy types.
Subpart F and the accumulated earnings tax could be combined in a corporate surtax aimed at major individual shareholders of U.S. corps that retain lots of earnings. $ @taxnotes.com
OBBBA "No tax" rev losses, JCX-35-25, bils.$:
- 32 No tax on tips
- 89 " on overtime
- 31 " on car interest
-212 " on some estates
-705 " on normal income*
*Ch. 3, Subch. A, 1,2,3,7
[Excl. soc sec (not really no tax) & s179 (small biz)]
RE: DHS negotiations -
If ditch Trump admin actions, clawback DHS/ICE $$, and revert to Biden 2024 EO, CBO says that still would be big net drop in immigration from Jan 2024 baseline.
So less paramilitary stuff, & >$500B in deficit reduction.
Where are my fiscal/state-power conservative friends?
This guy, as usual, is a must-read-listen.
As a process matter, he also seems to be handling well the when-do-I-say-something-with-free-access versus the insular-substack thing. It seems like some other really important voices are now getting buried behind paywalls.
bsky.app/profile/pkru...
What is a balance-of-payments deficit? I should know, but I don't. Nobody does. www.youtube.com/watch?v=VY6d...
23.02.2026 12:41 — 👍 331 🔁 82 💬 11 📌 8
... the next (Biden 46) administrative effort to fix student loan mess created by prior Admins.
This encourages Admins to do stuff to create "major questions" that didn't exist.
That means (theoretical or not?) administrative mess made by Trump 47 will need 2029 legislation to fix. Really?"
2/2
Student loans, being dragged into, and defamed in, the SC tariff debate, can be imagined to say:
"If last 4 or 10 years (e.g., before 2021) of prior Administrations badly botched something like student loans, the SC said that mess can then turn into a "major question," thereby hamstringing ... 1/2
Speaking of British monarchy, the 250 anniversary also isn't likely to trigger the kind of happyfest the administration wants.
E.g., I for one am not glibly going to the Mall to hear The Beach Boys (who to their credit were a more 'serious' band than commonly thought) like happened in 1976.
Follow-on: am fan of CBO, innovation, good wages (US-born & not), & apple pie.
But struggle with CBO slicing up surge into STEM immigrants increasing TFP vs. non-STEMs dragging down TFP.
Instead, at least for that surge, see both groups increasing TFP by offering labor indefinitely at discount.
I'm leery of the arguments that "less educated" immigrants (e.g., CBO below) tend to lower US total factor productivity.
1st, the categories seem blunt if not classist. 2nd, why doesn't a non-STEM immigrant's willingness to work at lower wage than others increase TFP? Are employers being fooled?
Some have rebutted WSJ's Greg Ip (whose charts are below) by saying GDI shouldn't be so ... gross. E.g., labor share falls less when consumption of fixed capital is removed.
Yet L itself is gross: no netting of employment costs, value of lost time, etc.
When taking G out of GDI, need consistency.
CBO is national treasure, incl. being straight about uncertainty.
That said, both findings below are influenced by CBO attributing most 2025-and-on net immigration reduction to "administrative policy" instead of OBBBA.
This 10/90 split flatters OBBBA more than, say, a 50/50 or 70/30 split would.
The immigration labor supply reduction that CBO attributes to OBBBA is swamped (by a ratio of about a 9:1 ratio, see ⬇️ CBO Sept. 2025 rpt) by immigration reduction that CBO attributes to "administrative policy."
Imagine what the chart above would look like if, say, that ratio was 3:7 or even 1:1.
Interesting stuff.
Quibble, tho, with the lede "Corporations are now taxed more efficiently than ever."
Where to start? OBBBA radicalized expensing w/ structures & weakened already-weak limit on debt financing. Tax rate on supernormal (esp. fgn) income is really low, etc.
bsky.app/profile/zlis...
Most cash-flow-based definitions of 'corporate efficiency' don't just push expensing: they also push denial of tax benefits for debt financing.
OBBBA actually backtracked on the latter, which was weak to begin with. Plus now we have never-tried expensing of structures, a recipe for tax shelters.
As a primary stat, I like cash tax numerator as I care about gvt revenue. For Amazon, that 2025 stat is 2.8% federal tax rate on US earnings in 2025; ITEP uses the accounting concept of 'current tax' to get 1.2%.
Also, Amazon is of special interest because (so far) not much foreign earnings. 2/2
Omri makes very good point here (he might even be a tax professor!)
Deferred tax is quite squishy - some DTAs (such as unused research credits) never get used, & some DTLs (e.g., linked to OBBBA expensing) may never get paid either, due to t/p behavior or law changes 1/2
bsky.app/profile/omri...
Also, the use of financial leverage at entity level (closely-held C-corp, LLC, or other pass-thru) to grow business shouldn't be lost in all this.
Entity-level borrowing by select group on favorable terms to accumulate (not necessarily consume) isn't reflected in Liscow and Fox.@bdgesq.bsky.social
For the pending DHS debate, 2 key findings from CBO, which has modeled immigration for 20 years:
(1) Biden policy initiated in June 2024 reduced net immigration by 400,000 in 2024, without gobs of wall/paramilitary/detention $$. Pre-Trump, CBO already foresaw a huge post-2024 immigration drop.
1/2
(2) CBO projects that OBBBA will reduce net immigration by 320,000 thru 2035. CBO found that Trump admin actions alone, not OBBBA funding, will cause reduction of 3+ million.
I calculate OBBBA immigration spending is ~$160B. That means federal govt is spending $500,000 per each net reduction.
2/2
For the pending DHS debate, 2 key findings from CBO, which has modeled immigration for 20 years:
(1) Biden policy initiated in June 2024 reduced net immigration by 400,000 in 2024, without gobs of wall/paramilitary/detention $$. Pre-Trump, CBO already foresaw a huge post-2024 immigration drop.
1/2
I'll throw in a possible caveat: the top wealth holders may not borrow that much for personal consumption, but it seems their companies often do, esp. early on.
So
"buy-borrow-die"
could be amended to
"buy-borrow for wealth accumulation-die"
or even
"buy-borrow for wealth accumulation-cryogenics"
Claims have been made that TCJA (and now OBBBA) stopped corporate inversions.
But a key inversion penalty is set to expire in Dec. 2027. Who wants to watch Pharma, probably the most aggressive major industry when it comes to inversion, walk their headquarters out of US?
bsky.app/profile/jame...
Why is GE paying all this tax to Singapore and not the US?
Because this is what we get when US tax policy puts tax havens first.
Clearly P2 rules are more stringent than the equivalent US rules (GILTI) which haven't managed to catch this in past years.
Kudos to Chm. Powell so far, but who really wants to be Fed chair when so many safeguards (econ & other) in other places have been eroded?
So Fed chair approval process should focus on more than Fed independence. The bond market alone (which after all is just another betting venue) won't save us.
Kudos to Sen. Tillis & others (incl. Jason) on this.
Yet it's been a broad attack on govt agencies (some without Fed's statutory protection?) & exec branch (e.g., inspectors general), and state-local govt too.
A neutral Fed matter less if this other stuff is partisanized.
bsky.app/profile/jaso...
