The Tax Foundation predicts that the Republican tax bill will increase the country’s gross domestic product by 3.9 percent (the GDP is currently gaining at 3 percent, and the Trump administration aims for it to hit 4).
The Foundation found that the plan would create 975,000 full-time jobs, and also increase wages by approximately $2,000 per year (on average) for citizens in all 50 states.
“Using the Tax Foundation’s Taxes and Growth (TAG) macroeconomic tax model, our analysis found that the “the plan would significantly lower marginal tax rates and the cost of capital, which would lead to 3.9 percent higher GDP over the long term [and] 3.1 percent higher wages.”
Indeed, the TAG model estimates that the plan would result in the creation of roughly 975,000 new full-time equivalent jobs, while increasing after-tax incomes by 4.4 percent in the long run. The increase in family incomes is the result of both the income tax cuts and the broader rise in productivity and wages due to economic growth. These estimates take into account all aspects of the House Tax Cuts and Jobs Act, including changes to the individual and corporate tax codes.”
A separate figure, prepared by the Tax Policy Center (which counts the left-wing Brookings Institution and the Urban Center as its parent organizations) admits that Trump’s tax plan will lower taxes for all Americans, but uses a microsimulation model to predict that taxes would increase for 50 percent of Americans in 2027. Without explaining the methods of this “microsimulation,” these figures were blasted out by the mainstream media Tuesday.
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