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!

HERE ARE THE FACTS:

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ONE MORE QUICK THING:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

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