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Kimberly Clausing @kclausing.bsky.social · 30/07/2026

(2/2) Even beyond the distortions, regressivity, dysfunction, and harm to foreign relations, tariffs are also failing as a revenue instrument. To give some perspective, total federal revenues are about 20x tariff revenues for 2025, and in 2026 tariff revenues will be lower.

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Kimberly Clausing @kclausing.bsky.social · 18/06/2026

[8/12] I also suggest levying the tax increase only on the largest (by profit) 2% of firms, with a surtax applying to the largest <0.5% of firms. This has both political and economic benefits, providing a nudge toward more competitive firms & no tax increase pain for 98% of payers.

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Kimberly Clausing @kclausing.bsky.social · 18/06/2026

[4/12] The second big motive is that international efforts are still needed to combat profit shifting and tax competition, forces that are alive and well, thanks in part to recent weakening of Pillar 2 global min tax. Still, Pillar 2 efforts are a good starting point.

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Kimberly Clausing @kclausing.bsky.social · 18/06/2026

[3/12] While this is a lot of (2030s) revenue, it is only 0.86 percent of GDP, so would close ~ half of the gap between US corporate revenue/GDP ratios and those of peer nations, which are about 1.5-2 percentage points higher. US public companies are the most successful in the world.

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Kimberly Clausing @kclausing.bsky.social · 18/06/2026

(2/12) With a huge thanks to @budgetmodel.bsky.social for scoring, the plan would raise a lot of revenue. And that is a key motivation for the proposal. We need revenue, capital income is the best base to bear higher taxes, and the entity level of tax is best way to holistically tax capital.

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Kimberly Clausing @kclausing.bsky.social · 09/06/2026

(2)/2 I'll post a thread on my paper soon. Corporate tax reform can generate revenue, improve tax fairness, enhance efficiency, and better align with the large potential of reforms abroad. It can also counter distortions in favor of foreign activity. In contrast, tariffs create new distortions.

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Kimberly Clausing @kclausing.bsky.social · 22/04/2026

(6/6) At present, the world needs collective action around the problem of collective action. Coalitions of the willing can show the way forward, but it will require both pragmatism and a lot of work, as pointed out recently by Canadian PM Carney. www.nytimes.com/interactive/...

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Kimberly Clausing @kclausing.bsky.social · 22/04/2026

(5/6) Such mechanisms have the potential to fuel cooperative solutions to global collective action problems, and they can also strengthen coalitions in the face of disruptive “spoilers”, a policy problem that may be particularly salient today.

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Kimberly Clausing @kclausing.bsky.social · 22/04/2026

(3/6) Solutions require several ingredients; most essential are incentive mechanisms that spur jurisdictions to adopt policy change instead of standing aside. In this regard, the CBAM and the Pillar 2 UTPR rule are hugely important - and often misunderstood -policy innovations.

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Kimberly Clausing @kclausing.bsky.social · 22/04/2026

(1/6) 🧵 My new working paper is out today @piie.com, comparing three global collective action problems that occupy my recent scholarly work: international tax, climate, and world trade. I look at both the nature of these problems, and lessons for progress in times ahead.

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Kimberly Clausing @kclausing.bsky.social · 24/02/2026

(5/6) And Trump has plenty of cards to play with trading partners.

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Kimberly Clausing @kclausing.bsky.social · 24/02/2026

(4/6) But there is also bad news. Tariffs will continue, alongside distortion, business uncertainty, consumer costs, and rampant opportunities for corruption and rent-seeking.

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Kimberly Clausing @kclausing.bsky.social · 24/02/2026

(3/6) These tariffs also expire in five months, unless there is an Act of Congress. Calling the question with Congress will not be successful, especially given the fact that this is a midterm election year, affordability is front of mind, and tariffs are deeply unpopular.

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Kimberly Clausing @kclausing.bsky.social · 24/02/2026

(2/6) Another good and important development: the President’s tariff cudgel is weaker. An even across-the-board tariff makes it hard to play foreign governments off each other.

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Kimberly Clausing @kclausing.bsky.social · 24/02/2026

(1/6) In my recent piece with Maurice Obstfeld @piie.com, we describe features of today’s US tariff environment. There are three bits of good news and bad news, but it is clear that Section 122 doesn’t apply. Most Important Good News: The Court defended separation of powers.

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Kimberly Clausing @kclausing.bsky.social · 20/02/2026

By 6-3 decision, tariffs struck down.

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Kimberly Clausing @kclausing.bsky.social · 05/11/2025

At least these small businesses are standing up for the integrity of the constitution (and demonstrating the harmful economic effects of tariffs). www.nytimes.com/live/2025/11...

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Kimberly Clausing @kclausing.bsky.social · 25/09/2025

(7/7) For more on a comparison of relevant climate policy actions for the United States, see this recent work: papers.ssrn.com/sol3/papers.... ceepr.mit.edu/wp-content/u...

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Kimberly Clausing @kclausing.bsky.social · 25/09/2025

(5/7) Further, climate policy *inaction* is regressive, harming poorer counties and households disproportionately. Poorer counties are more exposed to risks such as wildfire particulates, and the higher costs of home insurance and cooling are a larger share of income for poorer households.

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Kimberly Clausing @kclausing.bsky.social · 25/09/2025

(4/7) In the United States, natural disasters are far more consequential than heat, for both costs and mortality risks. Increased particulate matter from smoke causes more deaths than heat (as cold deaths fall); home insurance price increases are more important than higher cooling costs.

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Kimberly Clausing @kclausing.bsky.social · 25/09/2025

(3/7) When it comes to climate change, “blue” counties and “red” counties suffer similarly, with slightly higher costs for Trump-voting counties in comparison to Harris-voting counties.

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Kimberly Clausing @kclausing.bsky.social · 25/09/2025

(2/7) Guided by the literature, we examine several key vectors through which climate inaction affects households. Overall, household damages total nearly $600 by one estimate, and damages reach about $900 for ten percent of households.

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Kimberly Clausing @kclausing.bsky.social · 25/09/2025

🧵 (1/7) With @knittelmit.bsky.social and @cwolfram.bsky.social, happy to announce our new paper on “Who Bears the Burden of Climate Inaction?”, just posted for BPEA @brookings.edu. We find large climate cost impacts that vary by both geography and income. www.brookings.edu/articles/who...

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Kimberly Clausing @kclausing.bsky.social · 24/09/2025

(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.

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Kimberly Clausing @kclausing.bsky.social · 24/09/2025

(6/8) In terms of progressivity, tariffs are far less progressive than the income tax; they harm poor and middle-class Americans more than rich Americans for the simple reason that they fall on consumption, not savings, and savings rates increase with income.

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Kimberly Clausing @kclausing.bsky.social · 24/09/2025

(5/8) In terms of efficiency, tariffs perform poorly relative to other tax instruments, for reasons discussed at length in the paper. At current levels, efficiency losses approach one third of revenue raised.

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Kimberly Clausing @kclausing.bsky.social · 24/09/2025

(4/8) Once accounting for mechanical offsets, our revenue findings are compatible with recent 10-year estimates of tariff revenues, but readers should note these studies are not strictly comparable, and exemptions and evasion might reduce revenues further.

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Kimberly Clausing @kclausing.bsky.social · 24/09/2025

(3/8) In terms of revenue, we calculate tariff “Laffer curves” under multiple modeling assumptions, finding that tariff revenues peak at a level far short of what it would take to replace (or even dramatically reduce) income tax revenues.

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Kimberly Clausing @kclausing.bsky.social · 24/09/2025

(2/8) While tariffs have long been employed for various narrow aims, their use in today’s US economy is far more significant. Tariffs are a tax. In our paper, we evaluate the use of tariffs by broad tax policy criteria: revenue, efficiency, progressivity, and tax administration.

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Kimberly Clausing @kclausing.bsky.social · 24/09/2025

🧵 (1/8) My new working paper with Maurice Obstfeld, “Tariffs as Fiscal Policy”, was just posted today @piie.com. Within, we evaluate the new role that tariffs are playing in the US economy. www.piie.com/publications...

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Kimberly Clausing @kclausing.bsky.social · 05/09/2025

Something to bear in mind when spending time online. Social media and polarization are... related. Nice graphic from @financialtimes.com.

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Kimberly Clausing @kclausing.bsky.social · 02/09/2025

Survey respondents are connecting the dots between Trump's ruinous fixation on tariffs/deportations and their own dissatisfaction with economic disruption and cost increases. wapo.st/4n4W7ru

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Kimberly Clausing @kclausing.bsky.social · 29/08/2025

US Appeals Court rejects Trump Administration's IEEPA tariffs. The IEEPA tariffs are about 70 percent of them, by revenue. Link to full details here: storage.courtlistener.com/recap/gov.us...

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Kimberly Clausing @kclausing.bsky.social · 03/07/2025

So OBBB is soon law. My thoughts, in yesterday's blog. Three ways the big budget bill fails Americans www.piie.com/blogs/realti...

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Kimberly Clausing @kclausing.bsky.social · 27/06/2025

(2/4) First, higher interest rates will reduce the bang for the buck for taxpayers; more and more of tax dollars will finance prior debts instead of government services. And US fiscal irresponsibility may generate risk premiums that compounds this effect.

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Kimberly Clausing @kclausing.bsky.social · 18/06/2025

Barry Eichengreen on the lessons of history and the risks associated with unfettered stablecoin proliferation. www.nytimes.com/2025/06/17/o...

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Kimberly Clausing @kclausing.bsky.social · 11/06/2025

Re point 1, multiple sources show minimal growth effects from OBBB, due to both poor policy design and the drag of higher interest costs. See this excellent graphic from @brendanvduke.bsky.social

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Kimberly Clausing @kclausing.bsky.social · 11/06/2025

(1/4) Some of the perils of OBBB deficits: 1. higher interest rates a drag on growth 2. government spending cuts are offset by higher govt. interest payments, a terrible deal for taxpayers 3. higher interest costs will also swamp tax benefits for many households

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Kimberly Clausing @kclausing.bsky.social · 21/05/2025

#2 The bill is stunningly regressive; it will leave many worse off. CBO, Budget Lab,Tax Policy Center, Penn Wharton all agree. This vivid graphic is from Budget Lab, showing combined effects of regressive spending cuts and regressive tax cuts. (All *before* we consider regressive tariffs on top!)

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Kimberly Clausing @kclausing.bsky.social · 21/05/2025

🧵 (1/4) There are four fundamental flaws of the House tax bill. #1 It is fiscally irresponsible; all reputable sources agree. Bond markets & downgrades show US financial fragility; this is a bad time to take on trillions in additional debt toward no useful policy rationale.

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Kimberly Clausing @kclausing.bsky.social · 20/05/2025

(4/ ) @BudgetModel shows a similarly stark picture when pairing tax and spending; they also add dynamic effects. Middle-aged poor people fare the worst, a lifetime hit of about $40k. Whereas rich elderly people gain the most. budgetmodel.wharton.upenn.edu/issues/2025/...

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Kimberly Clausing @kclausing.bsky.social · 20/05/2025

🧵 (1/6) ‪Tax Policy Center, @budgetlab.bsky.social‬@taxpolicycenter, and PennWharton all have new analyses of the House bill; they paint a remarkable picture of a starkly regressive bill. Cuts to Medicaid/SNAP exacerbate the regressive pattern of the tax increases, making quite a picture.

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Kimberly Clausing @kclausing.bsky.social · 15/05/2025

(2/) Issue 1: As I note in my brief, the US fed govt has a large deficits and debt problem. This bill doubles down on the unaffordable tax rate structure of TCJA, and adds even more tax cuts on top. It is deeply fiscally irresponsible.

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Kimberly Clausing @kclausing.bsky.social · 04/04/2025

🧵(1/4) As POTUS makes mayhem with unprincipled tariff self-harm, he’s not alone. Congress is preparing its own unprincipled budget resolution. If folks wonder why the dollar fell upon this week’s tariff/budget news, we may be in a regime where the US faces a risk premium.

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Kimberly Clausing @kclausing.bsky.social · 31/03/2025

(2/7) Consider the VAT. More than 160 countries use VATs, which are domestic consumption taxes, akin to US sales tax w/ different collection method. They treat imports and domestic goods on a level. No discrimination.

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Kimberly Clausing @kclausing.bsky.social · 13/02/2025

1. The nation’s fiscal challenges are daunting. Given today’s high levels of deficits and debt, budget packages in 2025 should be revenue-neutral or deficit-reducing. Recent budget resolutions would instead expand the federal deficit, w/ substantial risks.

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Kimberly Clausing @kclausing.bsky.social · 20/01/2025

It will always be Denali to me. President Trump plans to sign executive orders to overhaul border and energy policies and end diversity programs across the federal government wsj.com/politics/pol... via @WSJ

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Kimberly Clausing @kclausing.bsky.social · 26/11/2024

Canadian lumber will be more expensive, raising construction costs. Mexican produce will be more expensive, raising grocery costs. US manufacturing will take a huge hit, as it is very integrated across North America, with countless border crossings for parts.

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Kimberly Clausing @kclausing.bsky.social · 11/11/2024

After twitter became X, like many, I created accounts at several likely alternatives. This one appears to be winning, so here we go. From now, I intend to post everything here too. In honor of the platform, yesterday's blue sky at LAX, and today's blue sky in London.

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