How should we measure tax policy? As you would expect, Democrats favor a simplistic and inaccurate way, that doesn’t even hint at the entire picture. Let me explain.
Without taking into account the actual effect of tax policy on economic growth, and business investing, they claim Trump’s new tax plan would lose the government $1.436 trillion, raising the yearly budget deficit. However, doesn’t it sound suspicious that Democrats – of all people – are concerned about the debt and the fiscal state of our nation? I can personally assure you, the “concern” of the Democrat on this front is entirely fabricated, hypocritical and dishonest.
However, this isn’t the end of their dishonest narrative weaving. They don’t even bother to factor in the effect of smaller government, and less government leaching off the economy that Trump’s massive tax reform would cause. Talk about refusing to see the forest for the trees!
Thankfully, Trump’s Treasury Secretary, Steven Mnuchin has forcefully argued that the tax reform plan will (obviously) produce massive economic growth, that would more than offset the lost revenue from the plan’s broad tax cuts.
The House’s tax bill – if passed by the Senate – is going to slash the individual tax rate, the corporate tax rate and streamline the entire tax code. This means that your after-tax income will spike, and the tax burden on your savings and investments will become much lighter – what’s not to love?
The think tank found that the bill would increase the gross domestic product by 6% in 2018 and boost GDP by 3% by 2027.
“The estimated boost to output diminishes over time primarily because the effects of aggregate demand fade and the effects of additional federal debt of interest rates grow,” the TPC said.
The group also released another separate report on Monday about how the various income groups benefit from the Senate’s tax bill which had cleared the Senate Finance Committee last week.