Kevin Hassett, head of the Council of economic advisers the White house on Friday published a 41-page report detailing prospects for reducing the corporate tax rate from 35 percent to 20 percent proposed by the presidential administration. The document says that the lower tax rates for businesses can increase the size of the U.S. economy at $ 700 billion to $ 1.2 trillion over the decade, while the average household income will eventually increase to $ 4,000 per year.
Democrats repeatedly expressed doubts concerning the possibility of achieving the goals by reducing corporate taxes. They continue to insist that the greatest benefit from the new tax plan will get rich investors, not the middle class.
Jared Bernstein, senior researcher at the liberal Center on budget and policy priorities, former economic adviser for the Obama administration calls described the prospects for «fairy tale.» The expert emphasizes that he sees the prospect of a reasonable revision of the corporate tax code, which would reasonably lowered rates and closed existing loopholes. But the plan of trump, in his words, designed for unrealistic results. The tax plan supported by the administration and Republican congressional leaders, puts more emphasis on tax cuts for companies and could increase the budget deficit, which ultimately will significantly harm long-term economic growth, reports the words of Bernstein ABC News.
Hassett, in turn, argues that expected economic growth with the adoption of the new tax plan will neutralize to eventually increase the budget deficit. His argument is that lowering corporate tax rates will lead to increased investment by firms in equipment and employees that will increase productivity and income. In addition, with the adoption of the new tax rules the American companies will have a big incentive to return manufacturing to the country or to register the foreign profits in the United States that, according to the economist, also have a beneficial impact on the economy.
