Two Economists, One Republican and One Democrat, Conclude Tax Bill Won't Pay For Itself

Chris Gaetano
Published Date:
Mar 9, 2018

Harvard economists Robert Barro, a conservative, and Jason Furman, a Democrat, said in a recent study that the Tax Cuts and Jobs Act passed by the Republicans in December will not, contrary to claims otherwise, pay for itself through economic growth. They estimate that the bill will grow the economy by 0.4 percent over the next decade, at the cost of $1.2 trillion, according to the Wall Street Journal. They added that there could be more growth if the multitude of temporary tax breaks included in the bill, such as the 100 percent bonus depreciation that expires in 2022 and the pass-through entities provision that expires in 2025, were made permanent instead. Doing this, according to the researchers, would triple that 0.4 percent growth to 1.2 percent over a decade, at the cost of an additional $500 billion. Where the two economists parted, though, was what this all meant. Furman, in his conclusion, said that the ballooning deficits caused by this bill would have a negative effect on the economy, while Barro said that the new law made the tax system more efficient. 

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