Treasury Secretary Steven Mnuchin, breaking with conventional economic thinking, said on Sunday the tax cuts would actually reduce the deficit because of the economic growth that they would trigger. A study produced last June by the conservative Tax Foundation found that a short-term cut to the corporate tax rate gives a smaller boost to economic growth that diminishes as its expiration date approaches. For now, those responsible for selling the tax plan are staying vague about how they will fit the tax cuts into a $1.5 trillion hole. As a result, the corporate tax rate cut could be smaller than many conservatives hoped. “The idea is to reduce risk and uncertainty, but having a 10-year tax cut adds more risk and uncertainty.”He added that the corporate tax rate could wind up being much higher than what many conservatives believe is the optimal rate to generate growth.

Source: New York Times October 01, 2017 22:30 UTC