The Paycheck Protection Program: Progressivity and Tax Effects

Authors

• David Splinter, United States Congress, Joint Committee on Taxation
• Michael Love, Columbia Law SchoolFollow
• Eric Heiser, Columbia UniversityFollow
• Jacob Mortenson, United States Congress, Joint Committee on Taxation

Document Type

Article

Publication Date

6-2026

Abstract

The $800 billion Paycheck Protection Program (PPP) provided COVID-19 pandemic relief to businesses retaining employees. Prior research has not directly estimated the PPP’s distributional or tax effects. Linking PPP loans to tax records, we estimate progressive effects with respect to income for both workers and business owners. Bottom-quintile incomes increased 18 percent and top-quintile incomes increased 2 percent. About half of PPP relief benefited workers. The PPP also increased taxes and decreased unemployment compensation, reducing net program costs by one-quarter. Net costs could have been even lower (and progressivity higher) without the tax exclusion of PPP forgiveness.

Disciplines

Labor and Employment Law | Law | Tax Law

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Comments

Online Appendix

© 2026 by The University of Chicago.

Recommended Citation

David Splinter, Michael Love, Eric Heiser & Jacob Mortenson, The Paycheck Protection Program: Progressivity and Tax Effects, 79 Nat'l Tax J. 409 (2026).
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/4839

DOI

https://doi.org/10.1086/738582