“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“A full-throated defense of economic dynamism.” - The Wall Street Journal
AI Summary.Federal Reserve Bank of New York researchers estimate that about 26% of a uniform tariff passes through into non-oil consumer goods prices over twelve months, with roughly 64% of that effect coming directly from higher import prices and the rest through domestic producers' input costs and markups. Pass-through into import prices is nearly immediate, while domestic price responses build gradually.
Mary Amiti,Sebastian Heise and David WeinsteinFederal Reserve Bank of New York
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FRBNY estimates that a uniform 10% tariff raised consumer-goods prices 2.6% after 12 months: 1.7pp directly via imported final goods, and 0.9pp mainly via higher imported-input costs for domestically produced goods, with the latter effect building over 9–12 months.
How much of a tariff reaches consumer prices within a year?
Core argument: Amiti, Heise, and Weinstein estimate that a uniform tariff passes through to non-oil consumer goods prices at roughly 26 percent over twelve months, with a 10 percent tariff raising prices 2.6 percentage points, 1.7 points of it via the direct import channel.
Tariff pass-through into U.S. import prices is nearly complete. Instrumenting realized duty rates with statutory tariffs to account for endogenous sourcing and exemptions, tariff pass-through into consumer-goods import prices is about 90.5%; a 10% increase in the duty rate raises import prices about 9.1%. At twelve months, a uniform 10% tariff raises consumer-goods prices 2.639%: 1.694pp through the direct channel, 0.770pp through marginal costs, and 0.175pp through strategic complementarity. Import-price pass-through is essentially immediate, while domestic prices adjust gradually; the contribution of the two indirect channels roughly doubles between six and twelve months, with much of the overall adjustment occurring within nine to twelve months. For the actual 2025–26 tariffs, the direct channel accounts for about 70% of the estimated effect; the marginal-cost channel accounts for about 22%, with strategic complementarity accounting for the remainder. Because the regressions include date fixed effects, the tariff contribution is identified relative to less-exposed goods and should be read as illustrative rather than as the absolute contribution to aggregate goods CPI.
Takeaways by Macro Roundup® AI
Amiti, Heise, and Weinstein estimate that a uniform tariff passes through to non-oil consumer goods prices at roughly 26 percent over twelve months, with a 10 percent tariff raising prices 2.6 percentage points, 1.7 points of it via the direct import channel.
The two indirect channels — marginal costs from imported inputs (0.77 percentage points) and strategic complementarity in domestic markups (0.17 points) — account for 36 percent of the total effect and roughly double between six and twelve months after tariff implementation.
Applied to the actual 2025–26 tariff schedule, the authors estimate the cumulative tariff contribution to goods CPI reached about 2.9 percentage points by February 2026, with import-price pass-through near 90 percent and retail pass-through of 0.56.
Related Articles:
The State of U.S. Tariffs July 24, 2026— The average statutory US tariff rate stands at 11.1% and, under current law including scheduled increases, is projected to reach 11.8% by year-end. The authors estimate current-law tariffs will raise consumer prices by about 0.7% and generate roughly $1.9tn over ten years, with revenue somewhat lower after accounting for tariffs' negative effect on economic output.
Who Is Paying for the 2025 U.S. Tariffs?— The authors estimate that 94% of U.S. tariff costs were borne domestically over the first eight months of 2025, with a 10% tariff associated with only a 0.6 percentage point decline in foreign export prices. Pass-through into U.S. import prices later declined to 86%, shifting more of the burden to foreign exporters.
Demand-Driven Inflation— Demand and supply curves estimated from pre-pandemic data imply relatively flat demand curves in the US and euro area, so adverse supply shifts would produce large output losses but comparatively little inflation. The authors argue explaining the observed combination of high inflation and output requires outward demand shifts, including accommodative monetary policy alongside fiscal expansion.
AI Summary.Incorporating tariffs into the standard cost-of-capital framework, researchers estimate US tariffs raised the economy-wide marginal effective tax rate on new investment by 4.2 percentage points to 17.0%, with equipment hit hardest at 26.1 percentage points. That increase offsets the 3.5 percentage point reduction from the One Big Beautiful Bill Act.
Kyle Pomerleau, Thomas Brosy, Robert McClelland and John WongAmerican Enterprise Institute
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The IEEPA tariffs through January 2026 raised equipment’s user cost of capital 9%, from 17.7% to 19.3%. With depreciation unchanged, the required pre-tax net return rose 1.6pp, 4.3% to 5.9%, a tax at purchase that expensing cannot eliminate.
Do tariffs raise the effective tax rate on new investment?
Core argument: Tariffs in force before the February 20, 2026 Supreme Court ruling in Learning Resources v. Trump raised the economy-wide marginal effective tax rate on new US investment by 4.2 points, from 12.8 percent to 17.0 percent, and the cost of capital by 2.7 percent, the AEI authors estimate.
The standard Hall-Jorgenson user cost of capital framework defines the minimum gross required return on an additional unit of capital. The service price of capital (SS) is the minimum pretax gross return required on a new investment; the minimum pretax net return (ρrho) equals SS minus economic depreciation. Consider imported equipment requiring a 25% gross return: 20% to cover depreciation and 5% shareholders’ demanded return. A 10% tariff raises the cost of capital to 27.5%. [Thus the minimum pretax net return—the hurdle rate—rises from 5% to 7.5%]. For equipment, tariffs raise the cost of capital 9%, from 17.7% to 19.3%: 86% of the burden is direct, 14% indirect. 100% bonus depreciation reduced the equipment METR from 19.1% to 4.1%; tariffs raised it to 30.3%, more than offsetting the tax cut.
Takeaways by Macro Roundup® AI
Tariffs in force before the February 20, 2026 Supreme Court ruling in Learning Resources v. Trump raised the economy-wide marginal effective tax rate on new US investment by 4.2 points, from 12.8 percent to 17.0 percent, and the cost of capital by 2.7 percent, the AEI authors estimate.
Equipment bore the largest estimated burden, with its marginal effective tax rate rising 26.1 points from 4.1 percent to 30.3 percent and its cost of capital up 9.0 percent, while mainframes and PCs saw a 26.6 percent cost-of-capital increase.
The estimated 4.2 point tariff-driven increase in the marginal effective tax rate offset the One Big Beautiful Bill Act’s 3.5 point reduction, leaving a net 0.8 point rise economy-wide and an 11.1 point net increase for equipment.
Related Articles:
Blunt Tariffs Undermine Efforts To Reshore High-Tech Manufacturing— Computer and electronic products manufacturers import 37% of their intermediate inputs and capital equipment, chemical manufacturers 33%, and transportation equipment manufacturers 27%. Broad tariffs may push some sourcing domestically over time, but many inputs will simply cost more, making American manufacturers less competitive globally.
Help for the Heartland? The Employment and Electoral Effects of the Trump Tariffs in the United States— The authors find that the combined effect of U.S.-China trade war import tariffs, retaliatory tariffs, and farm subsidies on employment in exposed U.S. locations was at best a wash and possibly mildly negative, while residents of tariff-protected areas became less likely to identify as Democrats and more likely to vote Republican.
Tariffs are Dumb Enough to (Almost) Work— A universal 15% tariff on imported goods could raise roughly $300–$400bn annually, a fraction of what a value-added tax would generate but real revenue given U.S. imports of about $4tn. The author argues tariffs are a poorly designed form of consumption tax that could build political groundwork for replacing them with a more efficient value-added tax.
AI Summary.An analysis finds a Social Security tax-increase package lowers the debt-to-GDP ratio by 14.3 percentage points, with 97% of that coming from smaller Social Security deficits rather than economic growth. A benefit-reduction package cuts the ratio by 29.2 percentage points, raising long-run GDP by 12.1% versus 0.4%.
Andrew BiggsAmerican Enterprise Institute
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A Penn-Wharton simulation finds that restoring Social Security solvency with tax increases alone would cut debt/GDP by ~14pp by 2060, while a fix based only on benefit cuts would cut it by ~29pp.
How do benefit cuts and tax increases differ in reducing debt-to-GDP?
Core argument: The benefit-reduction package cuts the debt/GDP ratio by 29.2 percentage points in the long run, more than twice the 14.3 percentage points under the tax-increase package.
The first figure [in the gallery] decomposes the tax-increase reform package’s improvement to the debt/GDP ratio into separate effects: how much does it cut debt versus how much does it raise GDP? Almost all of the tax-increase plan’s improvement in debt/GDP comes from lowering federal debt by raising taxes. The plan has a small negative effect on the economy in the short run and a small positive effect in the long run. But 97% of its 14.3 percentage point long-run reduction in debt/GDP comes simply from reducing Social Security’s deficits. The economy is little-changed relative to a baseline in which Congress simply borrows to pay Social Security benefits. The benefit-reduction package [second figure in the gallery] tells a different story. It reduces debt/GDP by 29.2 percentage points, more than twice as much as the tax-increase package. Part of that comes from a larger reduction in debt: 17.2 percentage points versus 13.9. But the real kicker comes from higher long-run GDP: 12.1% under the benefit-reduction package versus just 0.4% under the tax-increase package.
Takeaways by Macro Roundup® AI
The benefit-reduction package cuts the debt/GDP ratio by 29.2 percentage points in the long run, more than twice the 14.3 percentage points under the tax-increase package.
Of the tax-increase plan’s 14.3 percentage point long-run reduction in debt/GDP, 97% comes from reducing Social Security’s deficits, leaving the economy little changed relative to a baseline in which Congress borrows to pay benefits.
Long-run GDP rises 12.1% under the benefit-reduction package versus 0.4% under the tax-increase package, with debt falling 17.2 percentage points versus 13.9.
Related Articles:
The Fairest Way to Reform Social Security May Also Be the Worst Way to Grow the Economy— Fully closing Social Security's funding gap by raising the payroll tax rate would require an immediate, permanent increase from 12.4% to 17.6%, which would reduce labor supply and economic growth. Research on a prior benefit cut found affected Americans raised earnings by 61 cents per dollar of lost benefits, generating additional payroll tax revenue.
How Federal Spending is Distributed by Age— An analysis classifying $4.4tn of $7tn in federal spending by age finds retirees aged 65 and older receive $2.7tn, 38.6% of total outlays and 61.9% of age-assignable spending, versus $1.2tn for working-age adults and $449bn for those under 26. Social Security and Medicare account for 80% of age-assignable spending on older adults.
The Great “Transfer”-mation— Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.
AI Summary.The gap between French and German 10-year government bond yields has widened at a pace matched only during the euro zone sovereign debt crisis. France and the UK have less room than the US to close deficits with tax increases, as tax revenues equal 43.9% of GDP in France and 35.3% in the UK versus 25.2% in the US.
John AuthersBloomberg
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The spread between 10-year French OATs and German Bunds has widened at a pace seen only during the eurozone sovereign-debt crisis. John Authers warns that France “satisfies all the classic conditions for a major debt crisis.”
Do high tax burdens limit France and the UK's deficit options?
Core argument: The spread of 10-year French OATs over German Bunds has risen at a pace matched only during the worst days of the euro-zone sovereign debt crisis in 2011 and 2012, fueling talk of a second crisis centered in Paris.
Only in the worst days of the euro zone’s sovereign debt crisis, in 2011 and 2012, has the [spread of 10-Year French OATS over German Bunds] risen so fast. Talk of a second euro-zone crisis, this time with an epicenter in Paris, is growing, and it’s easy to see why. Why is this more of a problem for France and the UK? Beyond their deficits, they also shoulder much higher tax burdens than the US. Tax revenues are 25.2% of GDP in the US, the lowest of the major developed economies - but 35.3% in the UK and 43.9% in France. It’s hard to imagine after decades of tax-cutting, but a US politician could deal with the deficit fairly easily with a tax hike. It’s not clear that option is open to French lawmakers, even if they could somehow persuade voters to go along with them. The populist politicians of left and right, who currently look well placed in next year’s presidential elections, are in any case unlikely to try.
Takeaways by Macro Roundup® AI
The spread of 10-year French OATs over German Bunds has risen at a pace matched only during the worst days of the euro-zone sovereign debt crisis in 2011 and 2012, fueling talk of a second crisis centered in Paris.
Tax revenues equal 25.2% of GDP in the US, the lowest among major developed economies, versus 35.3% in the UK and 43.9% in France, leaving American politicians more room to close the deficit with a tax hike.
Populist politicians of left and right, currently well placed for France’s presidential election, are unlikely to attempt tax increases to address the deficit.
Related Articles:
French PM to Freeze Emmanuel Macron’s Pension Reform Until 2027— France's prime minister said he would suspend the plan to raise the retirement age to 64 until the next presidential election, while asking parties to agree on other savings. He outlined a €30bn package of spending cuts and tax rises to cut the deficit to 4.7% of national output from 5.4%.
Soaring Bond Yields, Gaping Deficits and Towering Debts: What Could Go Wrong?— An analysis of 22 rich countries estimates that if each refinanced its entire debt at current five-year bond yields, Britain would need the largest primary surplus to stabilize its debt-to-GDP ratio, about 1.5%, followed by Italy at 1.4%, France at 1.2% and America at 1%.
Global Debt Report 2026— Gross central government borrowing across OECD countries rose 7% to a record $17tn, about 23% of GDP, and is projected to reach roughly $18tn, or 24% of GDP. The United States and Japan account for close to 80% of the area's refinancing requirements, with the US share rising from 57% to 70%.
AI Summary.An analysis projects that by 2030 a rapid artificial intelligence growth scenario—3.3% annualized GDP growth with a rising capital share of income—could raise US federal revenues by up to $216bn, 3.3% above the Congressional Budget Office baseline. Because capital income receives preferential tax treatment, a falling labor share of income reduces the revenue gain that output growth would otherwise produce.
John Iselin and Ryan NunnYale University
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Iselin and Nunn expect AI to increase output growth but to reduce labor’s share of income. “This bias in AI-induced growth reduces the revenue increase one would otherwise expect, given the preferential tax treatment afforded to capital income.”
How much would AI-driven growth raise federal tax revenues?
Core argument: In a rapid AI growth scenario of 3.3% annualized GDP growth with a growing capital share, federal revenues by 2030 could grow by up to $216 billion, a 3.3% increase on top of CBO's 2026 baseline.
The additional output growth that is often expected from AI—a clear positive for the fiscal picture —is not the only potential impact that matters. Another widely expected consequence of AI adoption is a reduction in the labor share of income. This bias in AI-induced growth reduces the revenue increase one would otherwise expect, given the preferential tax treatment afforded to capital income. Further, any labor inequality effects of AI could increase revenues (in the case of increasing inequality) or reduce them (in the case of decreasing inequality). Because these channels are of first-order importance for understanding AI effects on tax revenues, our analysis focuses on their roles. Other channels, not considered here, could also turn out to have meaningful revenue implications. We project that by 2030, in a rapid AI growth scenario (3.3% annualized GDP growth and a growing capital share), federal revenues could grow by up to $216 billion, a 3.3% increase on top of CBO’s 2026 baseline.
Takeaways by Macro Roundup® AI
In a rapid AI growth scenario of 3.3% annualized GDP growth with a growing capital share, federal revenues by 2030 could grow by up to $216 billion, a 3.3% increase on top of CBO's 2026 baseline.
A reduction in the labor share of income from AI adoption would blunt the revenue gains otherwise expected from faster growth, because capital income receives preferential tax treatment.
AI's labor inequality effects could raise revenues if inequality increases or reduce them if inequality decreases, a channel of first-order importance alongside the shift in labor share.
Related Articles:
How Might Fiscal Policy Respond to the Rise of Artificial Intelligence?— The Congressional Budget Office estimates that a permanent 0.5 percentage point increase in annual productivity growth would lower publicly held federal debt after 30 years by 39% of GDP, offsetting roughly half the projected rise from 101% of GDP to 175%. Higher revenue and slower spending growth outweigh higher interest costs.
Can AI Avert the Impending Federal Budget Crisis?— U.S. GDP per capita, about $87,000, is projected to reach $102,000 by 2035 with 1.8% annual productivity growth, or $110,000 with 2.7% growth. Because the healthcare sector has been slow to adopt AI, health spending is projected to rise from 18.3% of GDP to 21% under slower growth and 21.7% under faster growth.
U.S. Treasury Investors Are Long in AI— The authors find U.S. government debt has a large positive productivity beta, because the tax code makes federal revenue highly sensitive to productivity growth while spending commitments change little, leaving bondholders implicitly long productivity growth. They argue greater market confidence in sustained productivity gains from AI could substantially reprice government debt, lowering nominal yields.
AI Summary.There is little evidence that fears of a Greek-style solvency crisis are driving U.S. interest rates, since long-term "breakeven" inflation expectations have changed little. Prices for credit default swaps, which insure against a U.S. government default, have also moved little.
Paul KrugmanKrugman Wonks Out
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Citing the stable long-term breakeven inflation rate and minimal rise in Treasury CDS prices, Krugman argues that high long-term rates reflect heavy federal borrowing, but not fears of outright default or inflation-induced debasement.
Are bond markets signaling fears about government solvency?
Core argument: Bond markets show very little evidence that fears of a Greek-style solvency crisis are driving U.S. interest rates.
There is very little evidence that fears of a Greek-style crisis are driving interest rates now. For example, if markets were really worried about U.S. solvency and the potential for the government to inflate the debt away, this should be reflected in measures that track inflation. But there has been, in fact, very little change in the “breakeven” inflation rate, a measure of long-term inflation expectations. Another indicator is the price of credit default swaps — insurance against a possible US default. These also haven’t moved much.
Takeaways by Macro Roundup® AI
Bond markets show very little evidence that fears of a Greek-style solvency crisis are driving U.S. interest rates.
The breakeven inflation rate, a measure of long-term inflation expectations, has changed very little, which would be expected to move if markets feared the U.S. government would inflate away its debt.
Prices of credit default swaps, which insure against a possible U.S. default, also have not moved much.
Related Articles:
US Bond Selloff Drives 30-Year Yields to Highest Since 2007— The yield on 30-year US Treasury bonds rose to as high as 5.34%, its highest level since 2007, amid investor concern over rising government spending, heavy sales of long-dated bonds, and inflation that has run above the Federal Reserve's target for five years. Long-term yields also rose in Canada and Europe.
The Budget and Economic Outlook: 2026 to 2036— The Congressional Budget Office projects the federal deficit will grow from $1.9tn (5.8% of GDP) to $3.1tn (6.7%) over a decade, above the 3.8% averaged over the past 50 years, with rising net interest costs driving much of the increase. Federal debt held by the public is projected to rise from 101% to 120% of GDP.
AI Is Driving Up Treasury Yields: ‘It Just Touches Everything’— Investment-grade companies have sold nearly $1.5tn of bonds, up 36% from a year earlier, and some investors have sold US Treasuries to buy higher-yielding corporate debt. Bank of America economists estimate the surge in corporate-debt sales, along with more mortgage-backed securities issuance, pushed 10-year rates up by about 0.3 percentage point.
AI Summary.Tariff refunds are boosting US corporate earnings and economic growth, with the Atlanta Federal Reserve's GDPNow tracker pointing to 4.3% growth this quarter, of which roughly 0.2 percentage points is estimated to come from tariff refunds.
Torsten SløkApollo
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Net tariff receipts turned negative in May as refunds outpaced custom duties. The Atlanta Fed projects GDP growth of 4.3% at an annual rate in Q3, of which Sløk estimates ~.2pp will be driven by tariff refunds.
Are tariff refunds adding to corporate earnings and GDP growth?
Core argument: The Atlanta Fed's GDPNow points to 4.3% US growth this quarter, of which roughly 0.2 percentage points are estimated to come from tariff refunds.
The tailwinds behind the US economy are not just AI spending, the industrial renaissance and the One Big Beautiful Bill. Tariff refunds have now joined the list. Not only are tariff refunds boosting corporate earnings, they are also boosting GDP growth. The Atlanta Fed's GDPNow currently points to 4.3% growth this quarter, of which we estimate roughly 0.2 percentage points come from tariff refunds. The bottom line is that the US economy continues to be supported by a growing set of tailwinds. Rates will stay higher for longer.
Takeaways by Macro Roundup® AI
The Atlanta Fed's GDPNow points to 4.3% US growth this quarter, of which roughly 0.2 percentage points are estimated to come from tariff refunds.
Tariff refunds are boosting both corporate earnings and GDP growth, joining AI spending, the industrial renaissance and the One Big Beautiful Bill as tailwinds behind the US economy.
With the US economy supported by a growing set of tailwinds, rates are expected to stay higher for longer.
Related Articles:
The State of U.S. Tariffs July 24, 2026— The average statutory US tariff rate stands at 11.1% and, under current law including scheduled increases, is projected to reach 11.8% by year-end. The authors estimate current-law tariffs will raise consumer prices by about 0.7% and generate roughly $1.9tn over ten years, with revenue somewhat lower after accounting for tariffs' negative effect on economic output.
The AI Capex Boom Is Building Twice as Fast as the Housing Boom— Data-center capital spending is projected to rise from 1.4% of GDP to 3.1% within two years, about 0.85 percentage points a year, roughly twice the pace of the housing boom's fastest stretch (0.5 points a year) and far above telecom fiber's (about 0.15). In level, the buildout exceeds twice the fiber peak but remains under half the housing peak.
The AI Investment Race— Technology-driven investment booms have historically ended in sharp corrections with wider economic fallout, and the current artificial intelligence build-out is on track to outgrow every previous episode within three years measured from its pre-boom trough. The expansion is increasingly funded by borrowing through bonds, special purpose vehicles and non-bank lenders, alongside circular financing arrangements that create interconnectedness among firms.
AI Summary.China is pursuing hundreds of billions of dollars in unpaid taxes from the ultra-rich, scrutinizing overseas capital gains and investments dating back as far as 2000 while also seeking to expand control of outbound capital flows. Budget revenue fell 1.7% to Rmb21.6tn ($3.2tn), and land sale revenue dropped from a Rmb8.7tn peak to Rmb4.15tn after a property slump.
Leo Lewis, Edward White, Sun Yu and Owen WalkerFinancial Times
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China has launched a tax crackdown on the overseas capital gains of China’s rich, as Beijing looks to offset a worsening fiscal outlook. Total government revenue from land sales has fallen ~52% since 2021.
Is China chasing decades of unpaid taxes to offset falling revenue?
Core argument: China has launched a global hunt for hundreds of billions of dollars in unpaid taxes going back decades, targeting the ultra-rich as Beijing seeks to fill a deepening fiscal hole.
China has launched a global hunt for hundreds of billions of dollars in unpaid taxes going back decades as Beijing seeks to fill a deepening fiscal hole by targeting the ultra-rich. Authorities have stepped up scrutiny of overseas capital gains and investments, in some cases going back as far as 2000, in a campaign that comes as Beijing also seeks to significantly expand control of outbound capital flows. China’s budget revenue, largely dependent on tax, has mostly plateaued since the pandemic, falling 1.7% to Rmb21.6tn ($3.2tn) in 2025. Total government revenue from land sales, once a core revenue source for the state, collapsed from a 2021 peak of Rmb8.7tn to Rmb4.15tn after a property market slump.
Takeaways by Macro Roundup® AI
China has launched a global hunt for hundreds of billions of dollars in unpaid taxes going back decades, targeting the ultra-rich as Beijing seeks to fill a deepening fiscal hole.
China's budget revenue, largely dependent on tax, has mostly plateaued since the pandemic, falling 1.7% to Rmb21.6tn ($3.2tn) in 2025.
Total Chinese government revenue from land sales, once a core revenue source for the state, fell from a 2021 peak of Rmb8.7tn to Rmb4.15tn after a property market slump.
Related Articles:
China Is Wrestling With A Novel Phenomenon: Inherited Wealth— The share of Chinese who believe effort is always rewarded fell from 62% in 2004 to 28% in 2023, according to survey research, with respondents now citing unequal opportunity, connections, and being born rich as the keys to wealth. Those reporting their family situation had improved over the prior five years fell from about 70% to 39%.
The Exodus of China’s Wealthy to Japan— Japan's Chinese resident population reached about 822,000, up 60,000 from a year earlier. Prospective Chinese buyers of Japanese property must move money out of China, which limits outflows, and secure visas—available to those investing at least $32,000 in a Japanese business with an office and two or more employees.
The Sinister Disappearance Of China’s Bosses— China's liuzhi detention system operates alongside normal policing, requiring no court approval and denying detainees lawyers, with windowless cells, constant lighting and round-the-clock supervision. Stock-exchange filings show 39 executives at listed companies disappearing into the system by the end of September, exceeding the prior year's record.
