Experts are battling over Republicans' biggest promise about their tax bill

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November 27, 2017 8:19 PM

A letter from nine conservative economists said that the Republican tax bill would grow the economy, other economists weren't so sure.

Nine conservative economists wrote a letter of support for the GOP tax plan on Monday, saying it would lead to increased economic growth.
Other economists took issue with the letter's assumptions and growth projections.
The letter and blowback are another chapter in the economic arguments over the effects of the Tax Cuts and Jobs Act.

Economists are waging a war of words over whether the GOP tax bill would follow through on one of the biggest promises made by President Donald Trump and Republican leaders.

All along, the GOP and White House have argued that the Tax Cuts and Jobs Act (TCJA) would lead to a major boost in economic growth, helping raise wages for workers and profits for companies.

Those assertions were supported by a letter from nine academic economists to Treasury Secretary Steven Mnuchin that ran in The Wall Street Journal on Monday.

Jason Furman, the former chair of Council of Economic Advisers under President Barack Obama, attacked the letter on Twitter.

The letter is another example of a long-running debate among economists regarding the potential growth benefits of tax cuts in general.

For instance, President Donald Trump's Council of Economic Advisors released two papers touting the economic impact of the Trump tax plan. One claimed the TCJA's corporate tax cut would lead to a 3% to 5% GDP boost over the long run, while the other suggested it would boost worker incomes by an average of $4,000 annually.

Many economists decried those analyses, saying they were based on bad math and rosy assumptions. Former Treasury Secretary Larry Summers called the CEA's analysis "

Looking at the larger sample size, a survey of top academic economists by the University of Chicago's Booth School of Business found that an overwhelming percentage believed that the bill would not lead to significantly higher economic growth over the next decade.

According to the survey, 52% of the 42 economists disagreed or strongly disagreed with the GOP notion that the bill will lead to an economic boost, while 36% were unsure. One economist said it would increase growth.

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