Congressional Scorekeeper Says Republican Tax Plan Will Bring About Economic Slowdown

Congressional Scorekeeper Says Republican Tax Plan Will Bring About Economic Slowdown

A new Congressional Budget Office analysis released today found that extending the individual provisions of the 2017 Tax Cuts and Jobs Act would drive up deficits and shrink GDP. Groundwork Collaborative Executive Director Lindsay Owens reacted with the following statement:

“The scorekeepers have spoken and it’s Groundhog Day all over again. Another Republican Congress and another round of tax breaks for the rich that will slow down our economy and add trillions to the deficit.

“President-elect Trump campaigned as a champion of the working class but his first act will be tanking the economy and throwing workers under the bus to line the pockets of his wealthy friends. The Trump tax scam is back for its second act, and Americans should brace for impact.”

Email press@groundworkcollaborative.org to speak with one of Groundwork’s experts about tax policy.

BACKGROUND

• The Congressional Budget Office estimates that a full extension of the individual provisions of the 2017 tax law would shrink GDP by the end of the 10-year budget window. Extending these tax cuts would not pay for themselves, despite claims from Congressional Republicans, and in fact, will be more expensive.
  • In 2023, even conservative experts conceded to the Senate Budget Committee that the 2017 tax cuts did not, and were never expected to, pay for themselves.
• The Institute for Macroeconomic Policy Analysis at American University found that the corporate tax cut in the 2017 tax law had no real impact on corporate investment, and job and wage growth actually slowed after enactment. In another analysis, IMPA assessed that Trump’s proposal to cut the corporate rate further to 15% would also shrink GDP.
• A 2023 study by experts from the Joint Committee on Taxation and the Federal Reserve found that the overwhelming benefit from the 2017 corporate tax cuts went to shareholders, top executives, and the highest-paid employees. Corporations overwhelmingly used the tax cuts to pay for trillions of dollars in stock buybacks, benefiting shareholders but doing nothing to grow or reinvest in the economy.
• A 2020 study of 18 countries over a 50-year period found that countries that passed major tax cuts had little effect on GDP and unemployment rates and failed to trickle down. The incomes of the wealthy grew faster and exacerbated income inequality.