Benefits of 2017 Tax Cut Benefits Were Outweighed by Lost Revenue

?From the new Trump administration, I hear there is talk about extending some of the 2017 tax benefits, tax reductions, etc. that is pleasing to the ears.? At the same time, the US deficit is constantly increasing.? This should scare all of us, but many feel tax cuts and extending 2017 provisions, which were meant to limit these prior tax cuts, is like candy to a child.

In an article printed in the Chicago Booth Review Harvard’s?Gabriel Chodorow-Reich, Princeton’s?Owen Zidar, and Chicago Booth’s?Eric Zwick?found that the TCJA has boosted investment, as well as wages and economic activity—but not nearly enough to make up for substantial losses in corporate tax revenues that have increased the deficit.?

This article cites research conclusions concerning the 2017 Tax Act as follows:

1.????? Business increased investment was too small to offset tax revenue loss from the lowering of the corporate tax rate.

2.????? Tax revenue reduced tax by 40%.

3.????? Accelerated depreciation generated more economic value per dollar of tax revenue than others.

In concluding I ask the new Trump administration and the general public to think carefully?about the impact of tax law changes on the deficits.? Do we want to continue to go down this road?

For those interested in this subject please google the University of Chicago, Chicago Booth Review, subject “The Trump Tax Cuts’ Benefits Were Outweighed by Lost Revenue”.