This US survey examines (a) All else equal, making permanent the 2017 tax cuts that were set to expire at the end of 2025 would substantially increase federal deficits and the federal debt over the coming decade; (b) All else equal, making permanent the 2017 tax cuts that were set to expire at the end of 2025 would measurably increase the rate of US economic growth over the coming decade, (c) In the US, given Congressional budget scoring rules, temporary tax cuts generate sufficient pressure for extension as to be effectively permanent
Keyword: tax cuts
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This US survey examines (a) US GDP is substantially higher now as a result of the passage of the TCJA than it would have been had the TCJA not been passed, and all else was equal; (b) Corporate capital stock is substantially higher now as a result of the passage of the TCJA than it would have been had the TCJA not been passed, and all else was equal; (c) Real median wages are substantially higher now as a result of the passage of the TCJA than they would have been had the TCJA not been passed, and all else was equal; (d) Federal tax revenues are substantially lower now as a result of the passage of the TCJA than they would have been had the TCJA not been passed, and all else was equal; (e) Charitable donations are substantially lower now as a result of the passage of the TCJA than they would have been had the TCJA not been passed, and all else was equal.
This week’s IGM European Economic Experts Panel statements:
A) Right now, the central focus of fiscal policy should be on temporary measures to provide protection and promote rapid economic recovery rather than trying to advance other objectives, such as reducing debt, tackling climate change or addressing inequality.
B) Cutting taxes on firms (or delaying tax collection) will allow more of them to survive and be more effective than public spending for triggering a rapid economic recovery.
C) European recovery fund disbursements to crisis-hit countries should be primarily in the form of grants rather than loans.
D) European recovery fund disbursements to crisis-hit countries should not be made on condition of commitments to reform by recipients.
This week’s IGM Economic Experts Panel statements:
A) Since 1980, whenever substantial growth effects have been required to make a tax reform plan revenue neutral, the actual outcome has invariably been a fall in tax revenue as a share of GDP.
B) The tax reform plan proposed by President Trump this week would likely pay for itself through higher economic growth.
This week’s IGM Economic Experts Panel statements:
A) A cut in federal income tax rates in the US right now would lead to higher GDP within five years than without the tax cut.
B) A cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut.
This week’s IGM Economic Experts Panel statement:
If the fiscal changes that are planned under current US law take place next year — including Bush era tax cuts expiring, Medicare payment rates to doctors being cut, the AMT applying to many more taxpayers, and automatic cuts in defense and non-defense discretionary spending kicking in — then US real GDP growth in 2013 will be lower than it would be under the CBO's alternative fiscal scenario, in which the above changes do not occur.
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