Penn Wharton: Republican Tax Plan Would Do Almost Nothing to Boost GDP

The Penn Wharton Business Model has analyzed the Republican Tax plan and reports back that it will have the following effect on GDP:

What’s that? The chart is too small and you can’t see the difference? No worries: your eyes are fine. The problem is that there virtually is no difference. PWBM figures that by 2027 GDP would be .58 percent higher than it would be under current law. That’s a difference of .05 percent per year. And that’s with dynamic pixie dust included.

In other words, GDP growth over the past couple of decades has averaged about 2.3 percent per year. The Republican tax plan would increase that to…2.35 percent. This is not exactly the supercharged 3 percent economy Donald Trump promised us.

And it gets worse after 2027. Thanks to the $5 trillion in extra debt the tax cut generates, the economy would lose even this tiny amount of extra growth and maybe even grow slower than it would under current law. Between 2017 and 2040, the total net effect of the Republican plan is basically zero.

But a bunch of rich people would be a lot richer. Mission Accomplished!

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It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

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We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

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Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

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