What Else Could a Tax Cut for the Richest 1% Buy in Your State?

Methods & Data Sources

For the cumulative and average tax cuts to the richest 1 percent in each state, as well as the average income of the richest 1 percent in each state, we relied on estimates from the Institute on Taxation and Economic Policy Microsimulation Tax Model for the Tax Cuts and Jobs Act introduced on November 2, 2017.

Health premiums

For health insurance premium costs in the individual marketplace, we relied primarily on 2018 premium data registered by insurance providers with healthcare.gov. The premium cost for our calculations was the cost of the second-least expensive Silver plan in the most populous county in each state, for a single 40-year-old adult.

Because healthcare.gov data only covers states in the federal marketplace, we also used data from the Kaiser Family Foundation’s 2018 premium calculator for the United States and for states with their own marketplaces (California, Colorado, Connecticut, District of Columbia, Idaho, Maryland, Massachusetts, Minnesota, New York, Rhode Island, Vermont, and Washington). We used the unsubsidized premium for the second-lowest cost Silver plan for a single, 40-year-old nonsmoker in each state’s most populous county.

Pell grants

The maximum Pell grant award for the 2017-2018 school year is $ 5,920. Our calculations represent the number of maximum awards that could be covered.

Infrastructure Jobs

The number of infrastructure jobs created by a federal investment depends on many factors: the specific type of infrastructure, the location, the likelihood that the infrastructure would be built without a federal investment, and more.

For the purposes of these calculations, we reviewed various estimates of the cost per infrastructure job created, ranging from roughly $ 36,000 per job created (Feyrer & Sacerdote, 2011) for investment through the Department of Transportation, to $ 92,136 per job created by government investment under ARRA (Council of Economic Advisors, 2009), among others.

For these calculations, we use an estimate from Feyrer & Sacerdote (Dartmouth/ NBER, 2011) of $ 105,485 per job created by federal investments through the Department of Transportation, Department of Energy, and the Environmental Protection Agency. Since the cost per job is high compared to other estimates, our estimates of job creation may be low. Also, in reality job creation costs are likely to vary by state. The Feyrer & Sacerdote approach means the reported job effects represent direct, indirect and induced effects – that is, employment in construction and related industries directly resulting from federal investment, but also the resulting boost to the local economy as the initial investment passes through to existing local businesses and their employees.