ECONOMY/GOP/TAXES: “The Republican plan to overhaul the U.S. tax code would likely lift economic growth in the short term, economists say, but they are split over whether the boost would last longer than a few years.
An overwhelming majority of forecasters in The Wall Street Journal’s monthly survey of economists said the GOP tax plan unveiled last month would, if implemented, raise the growth rate for U.S. gross domestic product over the next two years. Some 60% saw a modest lift to output compared with its current trend, while 27% said the annual growth rate would jump by more than half a percentage point.
The announced framework, which lacks some details and could change as lawmakers flesh it out in the coming weeks, features lower tax rates on corporate profits, incentives for business investment and fewer individual income tax brackets, among other changes.
But roughly half of the economists said any growth spurt would fade over time. Asked about the tax plan’s likely effect on the economy’s long-run growth rate, 48% predicted a modest increase while 38% said the U.S. would remain on its current trajectory. Just 4% said the tax plan would boost the GDP growth rate by more than 0.5 percentage point a year, while 10% said growth would be slower than if there had been no tax changes.”
-Ben Leubsdorf, “Economists See GOP Tax Plan Producing Growth Spurt, But Split Over Long-Term Effect,” The Wall Street Journal online, Oct. 12, 2017 10:00am