Even small increases in economic growth – especially if sustained over time – can translate into meaningful improvements in living standards.
But there are several reasons why it won’t be easy to “prove” that last year’s tax reform boosted the economy.
- It takes time for investment to increase, so the resulting improvements in productivity and wages don’t occur immediately.
- Other policy changes (most notably, growth-stifling trade barriers) can partially or fully offset the beneficial impact of tax reforms.
And there are probably other factors to mention as well.
The takeaway is that the nation will enjoy good results from the 2017 tax changes, but I fully expect that the class-warfare crowd will claim that any good news is for reasons other than tax reform. And … Read the rest