Progressive taxation is highly polarized in the United States because some states have millionaire taxes while others have no state income tax at all. The 2017 tax reform legislation, the Tax Cuts and Jobs Act, amplified these differences by capping the state and local tax, or SALT, deduction. This effectively reduced top tax rates in some states while increasing them in others, leading some, including governors, to worry that this new tax differential will set off a wave of millionaire tax flight and a new “race to the bottom” in state taxes on the rich. Using confidential data from IRS tax returns, the author will examine elite mobility and embeddedness in the wake of the 2017 tax reform. The author seeks to understand if the rich are more likely to move when their tax rates are high, whether the TCJA-induced tax differential led to greater migration, and, conditional on moving, how much this tax reform increased the likelihood that moves are to lower-tax destinations. These questions are of great importance as state and local taxes are essential for states’ capacity to provide services and alleviate inequality. And while previous work shows the existence of effects among particular job classes, this paper would provide policy-relevant estimates for the universe of high-earners in recent U.S. history.

When humans undertake physically intensive tasks, the body must release heat to maintain a safe internal temperature. Worker safety organizations have strict guidelines for climate conditions under which it is safe for workers to perform strenuous manual labor. Rising temperatures from climate change will increase the risk of heat stress, making outdoor work more difficult. This study seeks to quantify these implications for capital accumulation, growth, and consumption by building a discrete time growth model of a closed economy. Unlike standard climate-economy models, Casey, Fried, and Gibson will account for differences in the way that climate affects the production of investment goods and services, compared to consumption goods and services. The model is designed to capture how vulnerability to climate change differs between consumption and investment sectors and how this difference evolves over time. It builds on past work by considering climate change as a determinant of productivity and considering a more disaggregated representation of the economy.

Confronting climate change will require the United States to dramatically reshape large portions of its economy. Carbon-intensive sectors in manufacturing and mining, which have long been bastions for middle-class jobs in communities across the country, are expected to shrink. Fears among workers and the communities that rely on these jobs are not unjustified, given recent economic research on the effect of trade shocks and environmental regulations. Yet reductions in carbon-intensive industries are only one side of the coin in addressing climate change. While many industries may shrink, a dramatic investment in green and renewable industries may create new opportunities for workers throughout the country. There is almost no economic research, however, exploring whether and how green jobs will benefit workers and their communities. Leveraging job-posting data from Burning Glass Technologies, along with the U.S. Census Bureau’s Longitudinal Employer Household Dynamics, Curtis and Marinescu will estimate the long-run benefits that workers accrue when green technology investments in solar and wind are made in their communities, as well as which types of workers benefit and which do not. The three researchers also are planning to estimate the effect of having more green jobs on local economic outcomes, such as the employment rate, poverty rate, and average incomes.

This project will convene economists, political scientists, energy scholars, and policy practitioners to synthesize collective expertise on the role of carbon pricing and innovation in climate policy. Participants will discuss how carbon pricing has been used around the world, its economic and political potential as a climate policy tool, and the importance of considering political economy in the design, implementation, and durability of climate policies.

Forty-two percent of Americans report that they do not have savings that could be used to cover unexpected expenses, a staggeringly high number. And there are stark racial differences, with 38 percent of White households and 55 percent of Black households saying they don’t have money to cover an emergency expense—one manifestation of the Black-White wealth divide. Yet there is surprisingly little research on how typical month-to-month fluctuations in income affect consumption and even less evidence on how this consumption smoothing varies with wealth. Given how central consumption dynamics are for macroeconomics, it’s important to understand the sensitivity of consumption to income and how that might vary by race and wealth. This project uses exciting new data to explore how income shocks may be passed through to consumption. By linking deidentified administrative bank data with self-reported race information from voter registration records, the authors will be able to identify the response of consumption by race with a large enough dataset (the analysis sample consists of 1.8 million matched bank-voter records) to identify racial differences credibly. Understanding how well households can smooth consumption, and how and why some groups—such as Black and Hispanic households who have lower-than-average wealth—may face greater challenges in doing so, is central for developing policy to address economic inequality and ensure vulnerable households achieve economic security.

Capital gains are one of the largest components of income at the top of the wealth distribution and play a key role in measuring wealth inequality. Yet capital gains are rarely included in estimates of the wealth distribution in economics, mainly because measurement requires detailed information on the distribution of wealth at the individual security level. This project will construct a new dataset to directly measure the holdings of public equities and fixed-income assets for all individuals in the United States using internal IRS data from the 1099-DIV and 1099-INT forms, which have not previously been used by researchers. This improved data will allow for more accurate estimates of wealth inequality, including new estimates of top-end wealth inequality. It will also shed light on savings rates across the income distribution and bring to bear new evidence of whether the rich save more.