Unusual Unanimous Agreement from Economists that Debt Would Balloon Under GOP Tax Plan

Unusual Unanimous Agreement from Economists that Debt Would Balloon Under GOP Tax Plan. www.businessmanagement.news

Republicans have been selling their tax overhaul plan as a major booster for the U.S. economy. In fact, they have argued that it would grow the economy so much that cuts would largely pay for themselves.

But on both counts, top economists are doubtful.

In a new poll from the University of Chicago’s Booth School of Business, 38 economists from schools including Yale, MIT and the University of California-Berkeley weighed in on contentious points about the GOP tax plans.

On one question, the economists were asked whether enacting “a tax bill similar to those currently moving through the House and Senate” would lead to a “substantially higher” rate of economic growth a decade from now than it would otherwise.

Only 1 out of 38 economists — agreed. And he did so with reservations. He wrote: it was “another matter” whether the plan is “fair” because the senate proposal disproportionately benefits some of the richest Americans.

Economists were much more certain about what the tax bills would do to the debt. They were asked whether a tax bill like those in the House and Senate right now would leave the U.S. debt-to-GDP ratio (a common measure of how large the national debt is) “substantially higher” in a decade than otherwise. 100% of economists agreed.

Congressional Republicans have argued that the tax overhaul will launch so much economic growth that it will generate additional revenue, allowing cuts to pay for themselves. But the nonpartisan Committee for a Responsible Federal Budget said that it would not generate the kind of growth needed to pay for itself, and indeed, recent estimates from the congressional Joint Committee on Taxation found that both the House and Senate versions of a tax overhaul would add around $1.4 trillion in debt in order to pay for the tax breaks for the wealthy and corporations.