The Economic Impact of Bobby Jindal’s Tax Plan

Presidential candidate Governor Bobby Jindal of Louisiana has released his tax reform proposal which, among other things, seeks to reduce individual income tax rates, eliminate the corporate income tax, and reduce tax code complexity. The Wall Street Journal reported that a focus of the plan is to ensure that everyone contributes to income tax revenue, citing Jindal’s campaign which argues that the plan “re-establishes the idea that, in America, everyone is expected to help row the boat.”

The nonpartisan Tax Foundation released an analysis of Bobby Jindal’s tax plan. The report summarizes the plan’s many components and details its impact on the U.S. economy.

The report’s key findings include:

  • The plan would cut taxes and reduce tax revenue by $11.3 trillion over the next decade on a static basis. However, when accounting for the economic growth resulting from the increased supply of labor and capital, the plan would end up reducing tax revenues by $9 trillion.
  • The plan would also result in increased interest payments on federal government debt, creating a ten-year deficit somewhat larger than the estimates above.
  • The plan would increase taxes on low-income taxpayers, and cut taxes for both middle- and high-income taxpayers on a static basis. When accounting for economic growth, all taxpayers would see an increase in after-tax income of at least 6 percent by the end of the decade.
  • The plan would significantly reduce marginal tax rates and the cost of capital, which would lead to a 14.4 percent higher GDP over the long term, provided that the tax cut could be appropriately financed.
  • The plan would also lead to a 38.3 percent larger capital stock, 8.7 percent higher wages, and 5.8 million more full-time equivalent jobs.

Governor Jindal is now the fifth presidential candidate to release a comprehensive tax reform package. Jeb Bush, Donald Trump, Rand Paul, and Marco Rubio have also released tax plans.

Additionally, many other candidates have proposed various tax changes as standalone policy initiatives, rather than as a part of a comprehensive package. The Tax Foundation has created an interactive Presidential Tax Tracker which allows users to compare the details of each candidates’ various plans and proposals.

For more details, read the full report: Details and Analysis of Governor Bobby Jindal’s Tax Plan