How the Economy Would Get a Big Boost from the Tax Bill

Tax Foundation officials released a study Monday indicating that the passage of the Tax Cuts and Jobs Act would revitalize the economy and result in a 1.7 percent increase in Gross Domestic Product (GDP) over the next several years, while boosting Americans’ wages by 1.5 percent and creating 339,000 jobs.

The GOP-led Congress is expected to vote on the final version of its sweeping tax system overhaul bill sometime this week along strict party lines. Although Democrats slammed the bill and claimed it would give tax breaks to the rich and penalize middle class families, the Tax Foundation found that the bill — if its temporary aspects were permanently enacted — would initiate a long-term increase in both GDP and wages.

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“The Tax Cuts and Jobs Act is a pro-growth tax plan, which, when fully implemented, would spur an additional $600 billion in federal revenues from economic growth,” the Tax Foundation noted in its analysis. “The Tax Cuts and Jobs Act represents a dramatic overhaul of the U.S. tax code.”

If passed, the bill “would lower individual income tax rates for the next eight years, lower the corporate income tax from 35 percent to 21 percent, and move the United States from a worldwide tax system to a territorial tax system,” the Tax Foundation noted.

Mattie Duppler, a senior fellow at the National Taxpayers Union, said Monday on Fox News’ “Fox & Friends” that it’s “simply nonsensical” to say that middle-income Americans won’t experience a significant boost with the new tax bill because “the math doesn’t bear that out.”

“Democrats are opposing this bill for the same reason Republicans are supporting it, and that’s because it’s going to work,” Duppler said. “The assertion that this doesn’t affect middle-income family is simply not true.”

Related: Mnuchin Has ‘No Doubt’ Congress Will Pass Tax Bill Before Christmas

Pointing to the Tax Foundation’s analysis on the final bill, Duppler highlighted statistics showing that the average American’s after-tax income will rise by 1.8 percent.

“You look at the fact that only 30 percent of the country right now itemizes. That means the vast majority of Americans are just taking the standard deduction. And in this plan, the standard deduction is double,” Duppler said. “That’s in addition to the tax rates coming down for people in those middle-income brackets.”

Should Congress pass the bill, it will deliver President Donald Trump’s second landmark legislative victory, with the first being Senate confirmation of Supreme Court Justice Neil Gorsuch.

PoliZette writer Kathryn Blackhurst can be reached at [email protected]. Follow her on Twitter here.

(photo credit, homepage image: New York Skyline, CC0 1.0, by Canon EOS 5D Mark III)