Economists: The Trump Tax Plan Is Pretty Much Deficit Neutral

Posted: Oct 23, 2017 3:45 PM

It’s a given that Democrats are going to oppose President Trump on everything. Whatever the overtures from the Left about finding a bipartisanship consensus on legislation, or any other deal-making gestures by Democrats—we need to remind ourselves that it’s all crap. They’re not going to do anything to help this guy. They want him out in 2020 and tax reform, immigration reform, and bills that could make for a better job-creating environment are not going to allow that. So, what would be the economic benefits of the Trump tax reform package? The Free Beacon’s Ali Meyer broke it down. And quite frankly—it’s tremendous. The two main selling points: a possible five percent jump in GDP and a seven percent increase in wages [emphasis mine]:

President Donald Trump's tax reform framework could raise GDP by as much as 5 percent and wages by as much as 7 percent, according to a new study from Boston University economists.

"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 this growth can happen due to the plan's aim to reduce 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.

While critics of the plan have said the tax cuts will add costs to the economy, the Boston University economists say the plan is essentially revenue neutral due to the economy's expected expansion. They point out that closing corporate tax loopholes helps keep the plan revenue neutral and increased revenues are a result of broadening the tax base.


The Boston University study is similar to the findings from the Council of Economic Advisers study put out earlier this week, 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.

Wait—this whole plan is deficit neutral. It could add $4,000 to an average households income if we cut the corporate tax rate—how is this not a winning issue? For all the bellyaching about Trump’s economic agenda, it’s paying off. The Dow Jones reached 23,000 for the first time ever, small business confidence has reached record highs; the same with consumer confidence indexes. The Trump White House is just better for business. Today, Boeing and Singapore signed a $14 billion airplane deal that will create 70,000 jobs. Democrats, you lost, now get out of the way so we can get some real job creation going. Also, remember when CNN said a Trump win would be disastrous for the market?