Trump Tax Plan Will Not Bolster Growth, Economists Say -<br />By BINYAMIN APPELBAUMMAY 12, 2017<br />WASHINGTON — President Trump says the perfect medicine for the economy’s sluggish growth is a big tax cut.<br />“But poorly designed, deficit-increasing tax reforms are as likely to reduce growth as they are to add to growth.”<br />Economists see little short-term benefit in a tax cut,<br />but they think the government could strengthen long-term growth by focusing on the right problem: productivity.<br />Indeed, by some estimates, Mr. Trump’s plan could reduce economic growth — although such estimates necessarily<br />involve a large dollop of guesswork because the administration has provided few details.<br />Mr. Trump and his advisers say that leaving more money in the hands of businesses<br />and consumers will lead to more spending and investment, lifting economic growth, which has been stuck in a 2-percent-a-year rut.<br />An analysis by the Urban-Brookings Tax Policy Center of Mr. Trump’s campaign tax plan — which closely<br />resembles the current White House plan — projected that the net result would be slower growth.<br />“The top tax rates appear to have little or no relation to the size of the economic pie,” the Congressional<br />Research Service concluded in a 2012 report examining the impact of tax cuts on economic growth.
