In late December 2017, the United States slashed its corporate income tax rate (CIT) and became the latest example of a downward trend across OECD countries since the early 1980s (see Figure 1). 1 The passage of this CIT cut has rekindled the debate over who stands to benefit from it and whether such a type of tax cuts exacerbates income inequality. 2 While a large body of literature has focused on the burden of CIT on factors of production (i.e., capital and labor), studies that assess the cross-border impacts of national CIT cuts on income inequality have been few and far between. 3 This paper contributes to such a debate by presenting a multi-country DSGE model with heterogeneous agents to explore the effects of a unilateral CIT cut on domestic income inequality and, the often overlooked, international spillover effects. In particular, the model provides a mechanism by which a CIT cut increases income inequality, domestically and internationally, and examines how such increases are driven over the short and long runs. Our model consists of "capitalist" households, who own capital, and "worker" households whose income consists exclusively of labor income. Our model

This paper uses ten years of USDA's Agricultural Resource Management Survey data to evaluate the impact of the Tax Cuts and Jobs Act (TCJA). We simulate income tax returns at the household level using the survey's detailed financial and demographic information. We find that farm households in the top 10% of the income distribution realize 71% of the total tax cuts from the TCJA, while families in the bottom 20% of the distribution experience a slight increase in their income tax liabilities. Consequently, the TCJA reduces the progressivity of the tax code, particularly over years with lower farm household income.

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