Mr Americana, Overpasses News Desk
October 22nd, 2017
Once again, Democrats prove they cannot do basic math. They were wrong with Obamacare, they were wrong that Obama’s tax hikes would stimulate new business, and they’re wrong about Trump’s tax plan.
According to a new study from Boston University economists Trump’s tax plan could raise Gross Domestic Product (GDP) as much as 5% and individual average wages by 7%.
“We find that, depending on the year considered, the new Republican tax plan raises GDP by between 3 and 5 percent and real wages by between 4 and 7 percent,” the economists explain. “This translates into roughly $3,500 annually more annual real take-home pay for the average American household.”
Economists believe that will be achieved by the reduction of the marginal effective corporate tax rate from 34.6 percent to 18.6 percent, which they believe will grow the capital stock by 12 to 20 percent.
Democrat naysayers say the tax cuts will add costs to the economy, but the Boston University economists say the plan is essentially revenue neutral due to the economy’s expected expansion. They emphasize that closing corporate tax loopholes helps keep the plan revenue neutral and increased revenues are a result of broadening the tax base.
The study also shows that every American will benefit from the tax reform plan.
“The [Unified Framework] tax reform delivers small increases in lifetime welfare to current retirees and moderate ones to workers and future generations,” the study states. “All generations benefit from the policy. The old benefit slightly from higher rates of return on their investment, and the young from higher wages.”
The Boston University study is similar to The findings by the Boston University study are similar to a study conducted by the Council of Economic Advisers, which said that the average household income could increase by $4,000 annually if the corporate tax rate was cut from 35 percent to 20 percent.
“The truth is that a tax cut like this very conservatively will increase the median wage by about $4,000 a year over a relatively short time,” said Kevin Hassett, the chairman of the Council of Economic Advisers. “If you look at some of the more optimistic estimates of the literature and then run the thing over time you could be looking at $10,000, even $20,000 higher wages relative to baseline, and that’s the message of this tax reform.”
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