Does Economic Growth Drive GOP Tax Cut Strategy?

According to historical data, there is no correlation between a tax cut and economic growth.

Given that, GOP lawmakers are only expressing hope when they insist that tax cut bills in process would result in massive economic growth.

However, hope is not a strategy.

According to POLITICO, some tax cut measures have preceded periods of both GDP growth and decline.

Although tax cuts don’t have impact on GDP, one thing remains: the tendency to revert to the mean. When GDP temporarily popped up to 3% or 4%, it then moved back  to spend most of its time at 2%.

On the other hand, maybe the GOP is not interested in using a tax cut to stimulate economic growth.

Perhaps GOP legislators are using the “create a problem so you can solve a problem” strategy to destroy several programs and get support dollars from the donor class.

First, their tax reform approach will create an enormous deficit problem. They will then seek to solve that problem by eliminating Medicare, Social Security and Medicaid.

As a side benefit, the tax cuts they give to the wealthiest Americans will come back to them in the form of donations.

Perhaps that’s the real GOP strategy.

Leave a Reply

Your email address will not be published. Required fields are marked *