Saturday, January 13, 2018

Robert Barro on the Tax Bill

My colleague Robert Barro is enthusiastic about the recently passed tax bill. You can read his analysis of it here. His bottom line:
I estimate that the total tax package will create extra GDP growth of 1.1% a year through 2019. The main effect (0.8%) comes from changing the individual tax code, with the remainder from the corporate reform. Over the following eight years, the projected growth rate rises by 0.2 to 0.3 percentage point a year because of the law’s expansionary effects on long-run capital and GDP per worker.