December 01, 2017
The Republicans had planned to include a trigger mechanism in their tax plan, which would have automatically raised taxes in the event of budget deficits that exceeded targets. This is classically bad economic policy. It means that if growth slows and the economy falls into a recession, the government would be raising taxes. Such a tax increase when the economy is already slowing would further dampen growth, making a downturn worse.
This is very basic economics. The fact that the Republicans were prepared to include it in their bill indicates that they either have very little knowledge of economics or they don’t care about the economic impact of their tax plan. It would have been helpful if the media had highlighted this issue since it offers considerable insight into how the Republican leadership is thinking about this tax plan.
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