XPost: alt.tv.pol-incorrect, alt.fan.rush-limbaugh, alt.politics.usa
XPost: us.taxes
In a note to clients today, SMBC economist Joseph Lavorgna makes the case for renewing the 2017 Trump tax cuts, many of which are scheduled to expire at the end of 2025:
Extending the 2017 Tax Cut and Jobs Act (TCJA) will not cost the government money for two key reasons. One, the TJCA has already been in place for
nearly seven years and has generated $1.5 trillion more in revenue than what the Congressional Budget Office (CBO) predicted following its passage… federal revenues are running well above their long-term trend so there
is no reason for them to suddenly weaken! Two, the expiration of the TJCA would lead to record large tax increases, which the CBO then assumes will generate substantial federal revenues of approximately $3.5 trillion. This
is what budgeteers mean when they say the “deficit” will be larger if the
tax cuts are extended. In actuality, the economy would weaken on the back
of reduced consumption and investment, with the latter being the primary driver of productivity growth. No wonder the CBO is forecasting real GDP growth at just 1.8% over the next 10 years.
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