Weekly Economic Snapshot 4/3 - 4/7

Economic Facts for this Week

• Millionaires are poised to get 96 percent of the net tax cuts under the House Republican tax blueprint.
• The average value of estates subject to the estate tax in 2015 was over $14 million. Only people inheriting estates worth more than $5.49 million ($10.98 million for couples) are subject to the estate tax.
• Tax expenditures (i.e. provisions in the tax code that give preferences to certain activities) disproportionately benefit the very richest. The top 1 percent of households get over 27 percent of the benefits of tax expenditures, while the bottom 20 percent get only 4 percent. Capital gains and dividends are largely responsible for the disproportionate benefits going to the wealthy.
• According to the Tax Policy Center, macroeconomic effects of tax legislation are not large and are often overstated. “Changes in tax law….tend to affect the economy at the margins rather than fundamentally.” 

Chart of the Week:

  

Under the House Republicans tax blueprint, those making over $4.8 million a year would get a tax cut of $1.4 million a year on average. In contrast, those making between $52,000 and $89,000 a year would only get an additional $60 a year on average.

ICYMI

• Increased industrial robot usage from 1990 to 2007 decreased employment: an additional robot for each thousand workers reduced the percentage of the population that is employed by 0.2-0.3 percentage point and reduced wages by 0.3-0.5 percent.
• Thirty-seven percent of people in the United States (over 21 and not retired) participate in paid informal work (i.e. the “gig” economy). Correctly counting these workers in the official employment estimates from BLS would raise the labor force participation rate by more than 2 percentage points. 
• A law in Massachusetts that restricted employer access to criminal records (i.e. through a “Ban-the-Box” reform and restrictions on how much information employers can obtain) reduced recidivism among ex-offenders. 
• The share of Americans who feel that most people generally can be trusted fell to nearly 20 percent from over 60 percent in the early 1970s, when controlling for demographic changes, according to a new IMF Working Paper. Declining trust is partly attributable to higher economic inequality and creates real economic costs.
• Real GDP is unlikely to grow more than 2 percent per year over the next decade (and most optimistically could only hit 3 percent), according to research from Jason Furman, a Fellow at the Peterson Institute.

Coming This Week

• Tuesday 8:30am: U.S. International Trade in Goods and Service for February - https://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm
• Friday 8:30am: Employment Situation for March (Jobs Numbers) - https://www.bls.gov/news.release/empsit.nr0.htm