Cool. As a preview for U.S., 2nd column shows how OBBBA drove down marginal ETRs on investment. Because OECD regards that as timing, it's not targeted by Pillar 2.

Perhaps surprising aspect is U.S. extended expensing to some long-lived structures - not sure OECD would have expected that. Cheers.

Not to be a buzzkill, but something to watch: the U.S. is now deep into expensing and accelerated depreciation, and other nations likely will have to follow suit,

That shows up in marginal effective tax rates on investment, and is not captured by OECD P2 15% test.

www.taxnotes.com/lr/resolve/t...

Plus combining this easing of interest deductibility with the OBBBA expensing of structures sets up opportunities for tax shelters.

It's like we're back to the early 1980s - while the interest rates are lower, the actual tax benefit (expensing) is greater.

"Dilution" in the sense of a Pillar 2 bite on USMNEs.

With regard to the many Pillar 2 accommodations for the U.S., counting U.S. state/local corporate income taxes toward the 15% is the one I most agree with. [Though one could imagine OECD telling central govts to handle that issue internally.]

Just thru end of 2024, the OECD had already diluted Pillar 2 a lot for the U.S. - counting U.S. state corp taxes toward 15%, overlooking accel depreciation and expensing, flexing on tradable IRA credits, ignoring US BEAT, plus a lot of transition relief.

We're down to last few pieces of the loaf.

The context is that smaller nations that want more source taxation need to do so via collective action, otherwise they'll be bullied by US (which wants its blended NCTI to rule) or get undercut by other nations.

A robust Pillar 2 with no exceptions allows these nations to collect that tax. 2/2

As with the US head start on P2 with GILTI, the US with its citizen-based/worldwide/exit taxes has head start on any global personal min tax.

It would a good first step if, say, France, Netherlands and others simply raise their billionaire income tax rates to 10%. Then a stage 2 could follow. 2/2

(7/8) Together with the OBBBA, this fiscal switch of lower income tax revenues, higher tariff revenues, and spending cuts targeting poorer Americans will leave most Americans with lower after-tax incomes.

Cool. I appreciate that you were on to immigration-labor-supply early on.

This is all part of broad concern about many fluid econ baselines because so much (tariffs, deportation, IRS defunding, dereg) has been done in 6 mos by Admin policy. I'm worried that responsibility isn't/won't-be assigned.

Just checking @wendyedelberg.bsky.social & other economists (incl. J. Kolko on X) using immigration-adjusted "breakeven" jobs concept:

While "breakeven" may calm recession jitters, isn't it based on economy that's shrinking compared to 2024 projections? So "breakeven" isn't a normative take, right?

For example, about 1/2 of the 1979-2019 improvement in CBO's lowest income quintile is from Medicaid & CHIP (cite below).

If this in-kind healthcare really is of little value, it also would affect the view that the Census Official Poverty Measure overstates poverty. 2/2
www.cbo.gov/system/files...

Actually, am pretty sure FACT Coalition killed the revenge tax, so kudos.

Section 899 wouldn't have been (and wouldn't be, because we know it's still being held in reserve) very good for transparency with all those complicated penalties, and then with all that FDI exiting the U.S. to new locations.

Having no knowledge of standing, I wonder if indexing capital gains, but not interest expense and income, doesn't discriminate against debt-holders, for example, the quite sympathetic retirement funds of teachers or parsons.

This is if indexing won't apply to interest: that'd be a different thing.