The Senate’s version of the Tax Cuts and Jobs Act is expected to create 925,000 new jobs increase GDP by 3.7% above it’s current rate.
The Senate Finance Committee Chair, Orrin Hatch said that the tax reform proposal would be giving a typical family of four a tax cut of roughly $1,400.
“The Senate’s version of the Tax Cuts and Jobs Act is a pro-growth tax plan, which, when fully implemented, would spur an additional $1.26 trillion in federal revenues from economic growth.” the Tax Foundation stated. “These new revenues would reduce the cost of the plan substantially.”
The Tax Foundation estimates the tax reform proposal to actually lead to the creation of 925,000 new full-time jobs in the long run and the plan would boost the gross domestic product by 3.7%. The increase in GDP growth would allow the wages to increase by 2.9% and the capital stock would increase by 9.9%.
“The larger economy and higher wages are due chiefly to the significantly lower cost of capital under the proposal which reduces the corporate income tax rate and accelerates expensing of capital investment.” the Foundation explained. “These long-run economic changes are generated by several key provisions in the bill, particularly the corporate and individual income tax rate cuts and the accelerated expensing provisions.”
Senator Hatch said that this proposal is part of an effort to help Americans keep more of their hard-earned dollars, see their take-home pay increase and help them find new jobs.
“We’ve preserved and even strengthened incentives that ease financial burdens associated with growing families and ensured Americans can save for their retirement and invest in their future”, said Hatch. “The Senate proposal benefits Main Street businesses and modernizes the tax system in a way that will shift our economic landscape to make America a more inviting place for businesses to invest, keeping jobs from being shipped overseas.”
In comparison to the Senate bill, the Tax Foundation finds that the House version of the Tax Cuts and Jobs Act would create 975,000 new full-time jobs, increase the GDP by 3.9% and increase after-tax incomes by 4.4%.