Patrick Driessen
@pdriessentax.bsky.social
Major interest in tax policy but understand it's just one part of puzzle. Learning a lot from u-12, u-10, u-9, u-3, and u-2.
It's easy to be skeptical about a global personal min tax: absence of precedent, int'l fiscal cooperation seems to be dying in 2025, e.g., P2 troubles, etc.
But note that US, even with (only) a 10% income tax rate on billionaires, has head start⬇️(G20, 2024). So any lift would be easier for US. 1/2
But note that US, even with (only) a 10% income tax rate on billionaires, has head start⬇️(G20, 2024). So any lift would be easier for US. 1/2
October 16, 2025 at 3:17 PM
It's easy to be skeptical about a global personal min tax: absence of precedent, int'l fiscal cooperation seems to be dying in 2025, e.g., P2 troubles, etc.
But note that US, even with (only) a 10% income tax rate on billionaires, has head start⬇️(G20, 2024). So any lift would be easier for US. 1/2
But note that US, even with (only) a 10% income tax rate on billionaires, has head start⬇️(G20, 2024). So any lift would be easier for US. 1/2
I appreciate the careful framing of this report. But am a little mystified by absence of much discussion of the mechanics of the Trump II immigration policy, incl. the fiscal effort to target at-risk immigrants embedded throughout OBBBA.
In any case, hope the optimism expressed below is borne out.
In any case, hope the optimism expressed below is borne out.
July 2, 2025 at 7:15 PM
I appreciate the careful framing of this report. But am a little mystified by absence of much discussion of the mechanics of the Trump II immigration policy, incl. the fiscal effort to target at-risk immigrants embedded throughout OBBBA.
In any case, hope the optimism expressed below is borne out.
In any case, hope the optimism expressed below is borne out.
Below is from Senate staff doc. With OBBBA's 40% GILTI ded & 10% haircut, a 14% fgn rate avoids GILTI. Before, starting in 2026 it took a 16.4% foreign rate to avoid GILTI (13.125/.8).
Perhaps one reason the idea has circulated that OBBBA is tough on GILTI is there's a US obsession with QBAI.
Perhaps one reason the idea has circulated that OBBBA is tough on GILTI is there's a US obsession with QBAI.
July 2, 2025 at 1:57 PM
Below is from Senate staff doc. With OBBBA's 40% GILTI ded & 10% haircut, a 14% fgn rate avoids GILTI. Before, starting in 2026 it took a 16.4% foreign rate to avoid GILTI (13.125/.8).
Perhaps one reason the idea has circulated that OBBBA is tough on GILTI is there's a US obsession with QBAI.
Perhaps one reason the idea has circulated that OBBBA is tough on GILTI is there's a US obsession with QBAI.
I'm sorry to say that on net US bill doesn't tighten GILTI.
GILTI QBAI carveout is gone, but that's backstopped by GILTI deduction, plus frees up FTCs. FTCs for GILTI no longer are reduced by apportioned expenses, and GILTI haircut halved. Some of rev loss is FDII ded, but GILTI stuff is pro-MNE.
GILTI QBAI carveout is gone, but that's backstopped by GILTI deduction, plus frees up FTCs. FTCs for GILTI no longer are reduced by apportioned expenses, and GILTI haircut halved. Some of rev loss is FDII ded, but GILTI stuff is pro-MNE.
July 2, 2025 at 1:30 PM
I'm sorry to say that on net US bill doesn't tighten GILTI.
GILTI QBAI carveout is gone, but that's backstopped by GILTI deduction, plus frees up FTCs. FTCs for GILTI no longer are reduced by apportioned expenses, and GILTI haircut halved. Some of rev loss is FDII ded, but GILTI stuff is pro-MNE.
GILTI QBAI carveout is gone, but that's backstopped by GILTI deduction, plus frees up FTCs. FTCs for GILTI no longer are reduced by apportioned expenses, and GILTI haircut halved. Some of rev loss is FDII ded, but GILTI stuff is pro-MNE.
Left, CBO shows OBBBA lower 5 deciles avg -$409 yearly. Right, enacted permanent TCJA, proxied by 2027, had net tax and outlay of -$615 for lower half.
OBBBA benefits top groups more than original TCJA did, but both feast on lower income groups. Original TCJA's regressivity has been overlooked.
OBBBA benefits top groups more than original TCJA did, but both feast on lower income groups. Original TCJA's regressivity has been overlooked.
June 26, 2025 at 12:37 PM
Left, CBO shows OBBBA lower 5 deciles avg -$409 yearly. Right, enacted permanent TCJA, proxied by 2027, had net tax and outlay of -$615 for lower half.
OBBBA benefits top groups more than original TCJA did, but both feast on lower income groups. Original TCJA's regressivity has been overlooked.
OBBBA benefits top groups more than original TCJA did, but both feast on lower income groups. Original TCJA's regressivity has been overlooked.
Sen bill does well devoting $17B to adoption, dependent care, & DCTC.
But that pales next to radical* credit for private school donors costing $26B.
(*So sweet it's a tax shelter. Also, compare it to bill's denial of public-school-supporting prop tax ded.)
h/t @itep.org @amyhanauer.bsky.social
But that pales next to radical* credit for private school donors costing $26B.
(*So sweet it's a tax shelter. Also, compare it to bill's denial of public-school-supporting prop tax ded.)
h/t @itep.org @amyhanauer.bsky.social
June 23, 2025 at 1:16 PM
Sen bill does well devoting $17B to adoption, dependent care, & DCTC.
But that pales next to radical* credit for private school donors costing $26B.
(*So sweet it's a tax shelter. Also, compare it to bill's denial of public-school-supporting prop tax ded.)
h/t @itep.org @amyhanauer.bsky.social
But that pales next to radical* credit for private school donors costing $26B.
(*So sweet it's a tax shelter. Also, compare it to bill's denial of public-school-supporting prop tax ded.)
h/t @itep.org @amyhanauer.bsky.social
I've been pushing the idea OBBBA could cause a big labor supply shock. That technical framing is aimed at the fiscal debate.
But my dry language isn't intended to minimize full (incl. moral) scope of targeting at-risk immigrants as well as safetynet users. I am guessing CBO staff (⬇️) feel same.
But my dry language isn't intended to minimize full (incl. moral) scope of targeting at-risk immigrants as well as safetynet users. I am guessing CBO staff (⬇️) feel same.
June 21, 2025 at 1:35 PM
I've been pushing the idea OBBBA could cause a big labor supply shock. That technical framing is aimed at the fiscal debate.
But my dry language isn't intended to minimize full (incl. moral) scope of targeting at-risk immigrants as well as safetynet users. I am guessing CBO staff (⬇️) feel same.
But my dry language isn't intended to minimize full (incl. moral) scope of targeting at-risk immigrants as well as safetynet users. I am guessing CBO staff (⬇️) feel same.
Would add that expensing requires elimination of interest deductibility to avoid tax sheltering. But OBBBA will make an already-weak limit on interest deduction weaker.
CRS⬇️ in right column shows mostly (-) METRs for debt-financing under current law, and non-res structures will go (-) with OBBBA.
CRS⬇️ in right column shows mostly (-) METRs for debt-financing under current law, and non-res structures will go (-) with OBBBA.
June 13, 2025 at 6:44 PM
Would add that expensing requires elimination of interest deductibility to avoid tax sheltering. But OBBBA will make an already-weak limit on interest deduction weaker.
CRS⬇️ in right column shows mostly (-) METRs for debt-financing under current law, and non-res structures will go (-) with OBBBA.
CRS⬇️ in right column shows mostly (-) METRs for debt-financing under current law, and non-res structures will go (-) with OBBBA.
In the absence of a full score for OBBBA's targeting of at-risk immigrants, here's perhaps a useful 2024 CBO report on a "surge."
In looking at this, note that OBBBA reverses sign of the deficit effect of CBO's surge exercise, and OBBBA's effects likely are both smaller and bigger than $0.9T. 1/2
In looking at this, note that OBBBA reverses sign of the deficit effect of CBO's surge exercise, and OBBBA's effects likely are both smaller and bigger than $0.9T. 1/2
May 31, 2025 at 12:56 PM
In the absence of a full score for OBBBA's targeting of at-risk immigrants, here's perhaps a useful 2024 CBO report on a "surge."
In looking at this, note that OBBBA reverses sign of the deficit effect of CBO's surge exercise, and OBBBA's effects likely are both smaller and bigger than $0.9T. 1/2
In looking at this, note that OBBBA reverses sign of the deficit effect of CBO's surge exercise, and OBBBA's effects likely are both smaller and bigger than $0.9T. 1/2
These star authors nicely survey 7 policies, growth, & scoring.
Yet the policy "immigration of high-skilled workers" seems narrow as OBBBA & Admin's policies attack all immigration (students, H1-Bs, others). It's not the authors' fault, but what we really need now is the coming labor shock scored.
Yet the policy "immigration of high-skilled workers" seems narrow as OBBBA & Admin's policies attack all immigration (students, H1-Bs, others). It's not the authors' fault, but what we really need now is the coming labor shock scored.
May 29, 2025 at 6:31 PM
These star authors nicely survey 7 policies, growth, & scoring.
Yet the policy "immigration of high-skilled workers" seems narrow as OBBBA & Admin's policies attack all immigration (students, H1-Bs, others). It's not the authors' fault, but what we really need now is the coming labor shock scored.
Yet the policy "immigration of high-skilled workers" seems narrow as OBBBA & Admin's policies attack all immigration (students, H1-Bs, others). It's not the authors' fault, but what we really need now is the coming labor shock scored.
A good beginning. But where are the conventional and/or macro effects of the OBBBA's forced downsizing of the US population via tax penalties, reduced benefits, ICE funding, and such?
CBO & JCT say they look at this type of thing, so we should see numbers or at least a reason below doesn't apply.
CBO & JCT say they look at this type of thing, so we should see numbers or at least a reason below doesn't apply.
May 25, 2025 at 2:08 PM
A good beginning. But where are the conventional and/or macro effects of the OBBBA's forced downsizing of the US population via tax penalties, reduced benefits, ICE funding, and such?
CBO & JCT say they look at this type of thing, so we should see numbers or at least a reason below doesn't apply.
CBO & JCT say they look at this type of thing, so we should see numbers or at least a reason below doesn't apply.
The revenue estimate for House OBBBA section 899 (left, highlighted), as well as the macro evaluation (right) suggest that the proposal will blow up FDI and maybe portfolio investment flowing into the U.S.
(The revenue estimate suggests initial US penalty pickup later overwhelmed by FDI flight).
(The revenue estimate suggests initial US penalty pickup later overwhelmed by FDI flight).
May 25, 2025 at 1:25 PM
The revenue estimate for House OBBBA section 899 (left, highlighted), as well as the macro evaluation (right) suggest that the proposal will blow up FDI and maybe portfolio investment flowing into the U.S.
(The revenue estimate suggests initial US penalty pickup later overwhelmed by FDI flight).
(The revenue estimate suggests initial US penalty pickup later overwhelmed by FDI flight).
A process puzzle.
Left 4/29/25, CBO & JCT seem to say that as an exception they would include population changes in conventional estimates.
Right is CBO's director's 4/28/25 blog, saying population changes will not be in conventional recon estimates because of "timing." 1/2
Left 4/29/25, CBO & JCT seem to say that as an exception they would include population changes in conventional estimates.
Right is CBO's director's 4/28/25 blog, saying population changes will not be in conventional recon estimates because of "timing." 1/2
May 24, 2025 at 5:02 PM
A process puzzle.
Left 4/29/25, CBO & JCT seem to say that as an exception they would include population changes in conventional estimates.
Right is CBO's director's 4/28/25 blog, saying population changes will not be in conventional recon estimates because of "timing." 1/2
Left 4/29/25, CBO & JCT seem to say that as an exception they would include population changes in conventional estimates.
Right is CBO's director's 4/28/25 blog, saying population changes will not be in conventional recon estimates because of "timing." 1/2
I'm unaware of any mention of H recon's effect on existing or future immigration so far? Nor does JCT macro (for tax) below mention immigration at all, and labor/consumption projections are + modest for 2025-34.
CBO/JCT have been busy and are still cranking, so maybe tbd. This call will matter.2/2
CBO/JCT have been busy and are still cranking, so maybe tbd. This call will matter.2/2
May 23, 2025 at 12:46 AM
I'm unaware of any mention of H recon's effect on existing or future immigration so far? Nor does JCT macro (for tax) below mention immigration at all, and labor/consumption projections are + modest for 2025-34.
CBO/JCT have been busy and are still cranking, so maybe tbd. This call will matter.2/2
CBO/JCT have been busy and are still cranking, so maybe tbd. This call will matter.2/2
Still unsure of CBO/JCT call if immigration stuff in House recon (incl. ICE/DHS stuff & tax/outlay penalties) changes US population "significantly" and so affects either conventional (which CBO/JCT 4/29/26 letter below seems to suggest) or macro scores. 1/2
May 23, 2025 at 12:46 AM
Still unsure of CBO/JCT call if immigration stuff in House recon (incl. ICE/DHS stuff & tax/outlay penalties) changes US population "significantly" and so affects either conventional (which CBO/JCT 4/29/26 letter below seems to suggest) or macro scores. 1/2
On expensing topic, there's new -$148B kick for depreciation of structures. Aside from query about such huge change on merits, at same time the already weak interest deduction limitation is further weakened in the bill.
Tax expensing and debt-financing for L-T stuff invites big-time arbitrage.
Tax expensing and debt-financing for L-T stuff invites big-time arbitrage.
May 15, 2025 at 8:29 PM
On expensing topic, there's new -$148B kick for depreciation of structures. Aside from query about such huge change on merits, at same time the already weak interest deduction limitation is further weakened in the bill.
Tax expensing and debt-financing for L-T stuff invites big-time arbitrage.
Tax expensing and debt-financing for L-T stuff invites big-time arbitrage.
Cool. Two other aspects:
(1) CBO/JCT have done this for 20 years: it didn't just pop up in 2025.
(2) CBO/JCT's precise language is that the conventional estimate incorporates effects of population change. Technically that suggests this isn't same as adding dynamic score to conventional estimate.
(1) CBO/JCT have done this for 20 years: it didn't just pop up in 2025.
(2) CBO/JCT's precise language is that the conventional estimate incorporates effects of population change. Technically that suggests this isn't same as adding dynamic score to conventional estimate.
May 1, 2025 at 2:18 PM
Cool. Two other aspects:
(1) CBO/JCT have done this for 20 years: it didn't just pop up in 2025.
(2) CBO/JCT's precise language is that the conventional estimate incorporates effects of population change. Technically that suggests this isn't same as adding dynamic score to conventional estimate.
(1) CBO/JCT have done this for 20 years: it didn't just pop up in 2025.
(2) CBO/JCT's precise language is that the conventional estimate incorporates effects of population change. Technically that suggests this isn't same as adding dynamic score to conventional estimate.
To be taken seriously, the idea of a fixed ratio of (Federal revenue)/GDP has to discuss, among other things, the U.S. age pyramid.
E.g., below shows big increase at pyramid top, raising Federal health/Social Security/etc. costs, in relatively short time between 2000 and 2020. 1/2
E.g., below shows big increase at pyramid top, raising Federal health/Social Security/etc. costs, in relatively short time between 2000 and 2020. 1/2
April 15, 2025 at 10:26 PM
To be taken seriously, the idea of a fixed ratio of (Federal revenue)/GDP has to discuss, among other things, the U.S. age pyramid.
E.g., below shows big increase at pyramid top, raising Federal health/Social Security/etc. costs, in relatively short time between 2000 and 2020. 1/2
E.g., below shows big increase at pyramid top, raising Federal health/Social Security/etc. costs, in relatively short time between 2000 and 2020. 1/2
On how to frame income & tax distributions, when/if we escape the crazy of 2025:
Figure from @taxnotes.bsky.social article that advocates combo of national income plus net nominal holding gains of produced assets (both are national accounts concepts) to show comprehensive capital income. 1/2
Figure from @taxnotes.bsky.social article that advocates combo of national income plus net nominal holding gains of produced assets (both are national accounts concepts) to show comprehensive capital income. 1/2
April 14, 2025 at 2:02 PM
On how to frame income & tax distributions, when/if we escape the crazy of 2025:
Figure from @taxnotes.bsky.social article that advocates combo of national income plus net nominal holding gains of produced assets (both are national accounts concepts) to show comprehensive capital income. 1/2
Figure from @taxnotes.bsky.social article that advocates combo of national income plus net nominal holding gains of produced assets (both are national accounts concepts) to show comprehensive capital income. 1/2
Perhaps of note is impact of government employment: ~800K of U.S. state-local job loss by end of 2021 (below, TPC 8/9/23 report).
My novice read is that those losses are in the OECD data, and if taken out, U.S. looks much better. This also implicates the design of the state-local gvt pandemic aid.
My novice read is that those losses are in the OECD data, and if taken out, U.S. looks much better. This also implicates the design of the state-local gvt pandemic aid.
February 25, 2025 at 2:21 PM
Perhaps of note is impact of government employment: ~800K of U.S. state-local job loss by end of 2021 (below, TPC 8/9/23 report).
My novice read is that those losses are in the OECD data, and if taken out, U.S. looks much better. This also implicates the design of the state-local gvt pandemic aid.
My novice read is that those losses are in the OECD data, and if taken out, U.S. looks much better. This also implicates the design of the state-local gvt pandemic aid.
For sure, overall tax bite on wealthy is weak, but as @gabrielzucman.bsky.social G20 6/25/24 chart shows, the US isn't alone.
There's clamor to adopt elsewhere some of US tax infrastructure noted above. It would be a shame if the US dismantles that infrastructure just when it is most needed. 3/3
There's clamor to adopt elsewhere some of US tax infrastructure noted above. It would be a shame if the US dismantles that infrastructure just when it is most needed. 3/3
February 20, 2025 at 2:12 PM
For sure, overall tax bite on wealthy is weak, but as @gabrielzucman.bsky.social G20 6/25/24 chart shows, the US isn't alone.
There's clamor to adopt elsewhere some of US tax infrastructure noted above. It would be a shame if the US dismantles that infrastructure just when it is most needed. 3/3
There's clamor to adopt elsewhere some of US tax infrastructure noted above. It would be a shame if the US dismantles that infrastructure just when it is most needed. 3/3
Credit to CBO (and whomever may have assisted them) for getting this preliminary tariff response out.
The last section is important procedurally. IMO, CBO is right to model foreign govt retaliation in a point estimate even though that's a bit tricky to quantify.
t.co/82sQE7Fn9V
The last section is important procedurally. IMO, CBO is right to model foreign govt retaliation in a point estimate even though that's a bit tricky to quantify.
t.co/82sQE7Fn9V
December 19, 2024 at 2:28 PM
Credit to CBO (and whomever may have assisted them) for getting this preliminary tariff response out.
The last section is important procedurally. IMO, CBO is right to model foreign govt retaliation in a point estimate even though that's a bit tricky to quantify.
t.co/82sQE7Fn9V
The last section is important procedurally. IMO, CBO is right to model foreign govt retaliation in a point estimate even though that's a bit tricky to quantify.
t.co/82sQE7Fn9V
If we're looking at federal-centric distributional tables related to federal deduction for SALT, look too at 2025 for BBB passed by House with 80K cap (I would've preferred 40K, so be it) but still on net raised revenue.
It shows net +46B from well-off to fund pre-K & other safety-net things. 3/3
It shows net +46B from well-off to fund pre-K & other safety-net things. 3/3
December 11, 2024 at 3:35 PM
If we're looking at federal-centric distributional tables related to federal deduction for SALT, look too at 2025 for BBB passed by House with 80K cap (I would've preferred 40K, so be it) but still on net raised revenue.
It shows net +46B from well-off to fund pre-K & other safety-net things. 3/3
It shows net +46B from well-off to fund pre-K & other safety-net things. 3/3
Adding to Jesse's piece, the Tax Foundation finds growth-benefit-per-revenue-cost of keeping TCJA's estate and gift rule past 2025 ... to be much lower even than the 199A pass-thru deduction.
Accommodate legit small biz/farms/ranches, but after that this is a simple test of fiscal seriousness.
Accommodate legit small biz/farms/ranches, but after that this is a simple test of fiscal seriousness.
December 6, 2024 at 6:50 PM
Adding to Jesse's piece, the Tax Foundation finds growth-benefit-per-revenue-cost of keeping TCJA's estate and gift rule past 2025 ... to be much lower even than the 199A pass-thru deduction.
Accommodate legit small biz/farms/ranches, but after that this is a simple test of fiscal seriousness.
Accommodate legit small biz/farms/ranches, but after that this is a simple test of fiscal seriousness.
A pre-Netflix illustration of the idea of a current policy baseline is old fashioned gatecrashing, though even bolder.
Instead of telling the ticket collector "the guy behind me caused what I'm about to do," a current policy baseline is saying "the guy ahead of me caused what I'm about to do."
Instead of telling the ticket collector "the guy behind me caused what I'm about to do," a current policy baseline is saying "the guy ahead of me caused what I'm about to do."
December 6, 2024 at 5:35 PM
A pre-Netflix illustration of the idea of a current policy baseline is old fashioned gatecrashing, though even bolder.
Instead of telling the ticket collector "the guy behind me caused what I'm about to do," a current policy baseline is saying "the guy ahead of me caused what I'm about to do."
Instead of telling the ticket collector "the guy behind me caused what I'm about to do," a current policy baseline is saying "the guy ahead of me caused what I'm about to do."