Beware of Republican senators bearing tax cuts | Arkansas Blog

Friday, November 24, 2017

Beware of Republican senators bearing tax cuts

Posted By on Fri, Nov 24, 2017 at 10:24 AM

The hits just keep on coming against the Senate tax bill that Tom Cotton says will rain prosperity on us like a mighty trickle, this time from Vox:

Kent Smetters was in the trenches in the Newt Gingrich-era Congressional Budget Office and he’s a veteran of George W. Bush’s Treasury Department. His well-regarded new analysis just concluded the Republican tax plan won’t raise nearly as much revenue as its proponents say, or provide a meaningful boost to economic growth.

The problem, according to a pair of new analyses by the Penn-Wharton Budget Project, is that the Senate Republicans’ tax bill would increase federal debt by more than advertised, and increased debt accumulation would counteract much — or potentially all — of the positive growth impact of tax cuts. The result will likely be lower incomes for the bottom half of the income distribution even before considering the negative impact of inevitable spending cuts to offset the surprisingly low federal tax intake.

The reduction of revenue is long-term, the analysis says, even when assumptions are made about growth-boosting effects of tax cuts (an assumption hotly contested by many economists.)

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