Charts

There is broad agreement among researchers and analysts that immigration raises total economic output. By increasing the number of workers in the labor force, immigrants enhance the productive capacity of the U.S. economy.

With its complicated system of taxes and transfers, the United States is affected in a variety of different ways by the arrival of immigrants. This chart provides estimates of immigrants’ fiscal impacts (including the fiscal impacts of their descendants), shown separately by level of educational attainment.

This chart documents the sharp rise in state and local use of targeted business incentives for export-base industries (businesses that sell outside the local area or compete with goods and services from outside the local area). These incentives—job creation, investment, and R&D tax credits, as well as property tax abatements and job training subsidies—collectively rose from 0.5 percent of business value added in 1990 to 1.4 percent in 2015.

This chart presents the schedule for the Earned Income Tax Credit (EITC) for tax year 2014 and possible adjustments to maximize the impact.

This figure shows how SNAP has historically tracked rates of unemployment and economic downturns closely (denoted by the teal dotted line and gray bars, respectively). SNAP participation rates (as seen in the shaded blue area) are expected to fall as the economy continues to recover, as would be expected based on the pattern observed in previous recessions.

This figure compares the level of a household’s spending on food to the TFP level for its family size using data from the Consumer Expenditure Surveys from 1989 through 2011.

As shown in this chart, marginal tax rates are highest for those families with income at or above the FPL.

The U.S. personal saving rate has declined dramatically over the past several decades and is currently very low by historical standards. Americans saved about 4 percent of after-tax personal income in 2012, down from average saving rates of 5.5 percent in the 1990s, 8.6 percent in the 1980s, and 9.6 percent in the 1970s. 

The Budget Control Act of 2011 (BCA) legislated $500 billion of cuts to the national defense budget over the next ten years—an abrupt change that could weaken the Department of Defense (DoD) if the cuts are not distributed efficiently. However, as this graph demonstrates, sudden and significant changes to defense spending are not new challenges. 

Over the next ten years, approximately $4 trillion of deficit reduction are set to take place through the Budget Control Act of 2011 (BCA) the American Taxpayer Relief Act of 2012 (ATRA) and the sequestration, which went into effect on March 1, 2013. This graph, from the introduction of The Hamilton Project’s 15 Ways to Rethink the Federal Budget shows how these policies are projected to affect the debt-to-GDP ratio over the next decade. 

This figure shows the effects of the recent budget changes, including the sequester, on non-defense discretionary spending. Under these cuts this category of spending would fall to its lowest level in recent history. 

In 15 Ways to Rethink the Federal Budget, The Hamilton Project featured a diverse group of proposals by leading budget and tax experts from a variety of backgrounds, including academia, the private sector, and a range of NGOs experts for reducing the federal deficit while also encouraging broad-based economic growth.

Eliminating or limiting tax expenditures are commonly endorsed tax reform options. However, as with other approaches to raising taxes, the distributional consequences of reducing tax expenditures depend largely on which tax expenditures are eliminated. This chart presents the distributional consequences of eliminating each of the six largest individual tax expenditures.

Earnings have risen dramatically at the top since 1979—by more than 250 percent for households in the top 1 percent of the income distribution. At the same time, many households at the middle and bottom have experienced stagnating incomes or even declines in earnings. 

One of the primary reasons America’s tax revenues remain low relative to other industrialized countries is our use of special tax preferences, or “tax expenditures,” that provide individuals and businesses with opportunities to reduce their tax bills by undertaking certain actions. The magnitude of tax expenditures is comparable to the largest government spending programs; in total, they are about 8 percent of GDP.

This chart shows how different effective corporate tax rates translate into pretax profitability. Companies in high-tax industries, such as steel, trucking, or utilities, must earn more than $1.40 in before-tax profits, on average, to return $1 to investors. On the other hand, companies in low-tax industries, such as biotechnology and Internet services and software, need to earn less than $1.20.

This chart uses the economic evidence from twenty-three published studies cited in Chetty (2011) to illustrate how a 10 percent cut in individual income tax rates might increase the pretax earnings of the typical tax-paying family earning about $70,000 per year.

During the last four decades, U.S. corporate income tax has declined as a share of national income and total federal revenues.

Federal debt as a percentage of GDP continues to grow in the aftermath of the Great Recession.

Three different GDP growth scenarios show potential growth scenarios for the next twenty years.