The Great American Tax Heist Turns One: Live at Project Syndicate
Time has passed: a year's worth of water under the bridge. But I have not become less angry at and disappointed with how the Republican economists behaved in what my Project Syndicate editors call the Great American Tax Heist of last December:
Live at Project Syndicate: The Great American Tax Heist Turns One: Last December, Republicans relied on the support of conservative economists who predicted that the party's corporate tax cuts would boost productivity and investment in the United States substantially. The forecasts were wrong, and the silence of those who made them suggests that they knew it all along....
Critics of the “Tax Cuts and Jobs Act” described it as a cynical handout for wealthy shareholders. But a substantial number of economists came out in support of it.... One prominent group, most of whom served in previous Republican administrations, predicted in The Wall Street Journal that the tax cuts would boost long-run GDP by 3-4%, with an “associated increase” of about 0.4% “in the annual rate of GDP growth” over the next decade. And in an open letter to Congress, a coterie of over 100 economists asserted that “the macroeconomic feedback generated by the [tax cuts]” would be “more than enough to compensate for the static revenue loss,” implying that the bill would be deficit-neutral over time... Read MOAR at Project Syndicate
I do need to offer a correction—I missed this in editing. There is daylight between Greg Mankiw and the others. It is not true that Greg Mankiw "claimed that the productivity gains stemming from the tax package would primarily boost wages". Rather, Mankiw claimed that in analyzing the proposed Trump tax cut the "relevant exercise... [was] an open economy... [in which] he capital stock adjusts so that the after-tax marginal product of capital equals the exogenously given world interest rate r" and thus that the productivity gains stemming from the tax package would primarily boost wages.
There is daylight in the distinction between "claimed" and "relevant exercise shows"...
I regret my error.
#shouldread #macro #economicgrowth #fiscalpolicy #highighted #orangehairedbaboons #moralrsponsibility
