I am all for Trump's tax plan, I think it is fantastic (I'm not an economist). We had something similar in Australia anyway.
During the GFC, we were given $40billion of handouts - $900 to every person in Australia earning under a certain amount - we ended up avoiding a recession. This temporarily boosted our growth, kept businesses actually in business. This money was wasted mainly on whitegoods/electrical goods and other depreciating assets which are all probably broken now - rather than invested.
But this put us in debt - from actually having money in the bank - I think we had 30billion in the bank. Since then our debt has been spiraling out of control.
They've had to increase our income tax, add levy's, and other hidden taxes to make up for the shortfall. We've ended up paying far more than $900 back. I know my tax rate has gone up from 34% -> 37.5% which is approximately $4000 a year.
What I am saying is, it might be a good short term measure to increase growth. What will happen in the long term? You have to pay extra the 1 trillion in interest compounding yearly. You'd hell want to be making that back in growth at a minimum.
Again I am all for the tax break & hope it does work for the Americans. I hate paying nearly 40% tax myself which is wasted on rubbish yearly.
Correct me if I am far off the mark.
The tax break is very temporary and after 2019 most people will be paying more in taxes and not able to claim deductions allowed previously. Most people don't know what is in the tax plan yet, including the politicians that approved it. Did you read the whle thing?
The notion that people will be paying more when the tax cuts sunset, is completely false. When (if) the Trump tax cuts expire, rates will return to where they are now. That is not an increase, it's a return to normalcy.
Secondly, why is no one talking about why the tax cuts are temporary? They are temporary to conform to the House rules. Democrats have come out in force against this tax bill from the beginning. In order to pass the bill without a Democrat filibuster, it had to go through reconciliation - where it could be passed with a simple majority, not the 60 votes normally needed. One of the strings that comes with reconciliation is the Byrd rule - that a bill can not add to the deficit outside of 10 years, which means it has to expire. For all the talk coming from Democrats about personal tax rates "raising" in 10 years, all they had to do was give the Republicans a 60 vote majority, and they would have been permanent. Instead, they are filling you people full of lies, in order to scare you into voting for them in 2018.