ECONOMY/GOP/TAXES/TRUMP AS PRESIDENT: “The U.S. economy is about to become the proving ground for GOP tax-cutting theories.
President Donald Trump and congressional Republicans are betting their tax overhaul will jolt the economy after a long but slow expansion. A sharp cut in the corporate-tax rate is meant to spur business investment and hiring. A rewrite of tax laws covering international profits is meant to bring corporate funds home. Lower individual rates are meant to give households more money to spend or bolster their finances. Fewer breaks, in theory, would make the economy more efficient…
This time, the Trump administration says growth of 3% or more is possible after more than a decade near 2%. The economy has already delivered faster growth in the second and third quarters. But there are significant headwinds, including an aging workforce marked by retiring baby boomers and puzzling sluggishness in worker productivity. Independent economists say the tax cuts won’t pay for themselves, driving deficits higher by $1 trillion over a decade even after accounting for stronger growth.
Although polls suggest households are skeptical of the tax overhaul, expectations in markets and among some companies couldn’t be much higher. The Dow Jones Industrial Average has rocketed up nearly 5,000 points this year…
Other executives say tax changes would have little bearing on their investment or hiring decisions, saying growth is constrained more by their ability to find skilled workers than it is by high taxes.”
-Nick Timiraos and Kate Davidson, “Tax Cuts to Test GOP’s Economic Pledges,” The Wall Street Journal online, Dec. 19 2017 07:56pm