Washington, DC - The proposed Tax Cut and Jobs Act now making its way through both houses of Congress will slash taxes by some $1.5 trillion over 10 years.
How much bang for the buck does that give? Quite a lot, according to a new Heritage Foundation forecast.
Actual GDP will by permanently higher by anywhere from 2.6% (House) to 2.8% (Senate). The point is, both bills, though widely criticized and certainly not perfect, are economic-growth bills. They will expand the economy, and make a big difference for average households.
How big a difference? Annual GDP per household will be permanently higher by an inflation adjusted $4,098 under the House bill, and $4,403 under the Senate bill. These are significant boosts to household incomes after nearly two decades of stagnation in median real incomes, and would go a long way toward ending the early 21st century economic malaise that began after the dot-com boom went bust.
The point is, the magic missing from our economy in recent years has been growth. Average 2% GDP growth over the past decade is substandard. Restoring our historic path of 3% growth is within reach.