A Macroeconomic Analysis Of HR 7024 ” The Tax Relief For American Families And Workers Act of 2024″ As Ordered Reported By The Committee On Ways And Means, January 2024.

Prepared By The Staff Of The Committee on Taxation.

Pursuant to House Rule XIII(8)(b), this document, 1 prepared by the staff of the Joint Committee on Taxation (“Joint Committee staff”), provides an analysis of the macroeconomic effects of H.R. 7024, the “Tax Relief for American Families and Workers Act of 2024,” as ordered reported by the Committee on Ways and Means on January 19, 2024. The basis for this analysis is the projected change in tax revenues as estimated by the Joint Committee staff.(2)

MACROECONOMIC ANALYSIS OF H.R. 7024
This report provides an analysis of the macroeconomic effects of a proposal to reform the Internal Revenue Code (“Code”). Specifically, the proposal analyzed here is summarized in JCX-2-24, Description of H.R. 7024, The “Tax Relief for American Families and Workers Act of 2024,” as ordered reported by the Committee on Ways and Means on January 19, 2024. 3 The Joint Committee staff finds that it is impracticable to report changes to Gross Domestic Product (“GDP”) from this proposal because they are estimated to be so small relative to the size of the economy and the degree of uncertainty associated with the estimate as to be negligible over the 10-year budget window. As a result, the revenue feedback resulting from this proposal is also estimated to be negligible.

The following discussion describes the proposal and explains why the macroeconomic effects and revenue feedback that would result are estimated to be negligible. The Joint Committee Staff used three macroeconomic simulation models to analyze the effects of the proposal: (1) the Joint Committee staff’s Macroeconomic Equilibrium Growth Model (“MEG”);4 (2) The Joint Committee staff’s Overlapping Generations Model (“OLG”);5 and (3) the Joint Committee staff’s Dynamic Stochastic General Equilibrium Model (“DSGE”).6 A brief description of the models appears in the Appendix to this document.

The Joint Committee staff estimates that H.R. 7024 will reduce Federal revenues by about $399 million over the budget window on a conventional basis, and that macroeconomic effects do not additionally increase or decrease this estimate.

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