U.S. Outlook: Tax reform reaches the finish line

Scott Anderson
Posted by Scott Anderson
Chief Economist

As Republicans in the House and Senate succeeded this week in passing the final version of their tax reform bill, we take one more look at some of the highlights and fine‐tune our macroeconomic forecasts for the next few years based on the contours of the final package.

graph showing rise of debt as percentage of US GDPFor more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Dec. 22.

Key observations:
  • This is largely a corporate tax cut bill with temporary personal income tax relief mixed in.
  • The U.S. economy should see some increased consumer spending and business investment over the near term, all else being equal.
  • The tax reform cuts could widen the U.S. deficit by $1.455 trillion over the next 10 years.
  • While the final bill is hundreds of pages and the devil is in those details, we estimate a boost to U.S. real GDP growth in 2018 and 2019 of around 0.3 percentage points.

Read my full report.

NOTE: U.S. Outlook will not be published next week but will return in the new year. Happy holidays!

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