Waiter, Can We Have the Bill Please? Republican Tax Reform in One Chart
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On Tuesday, 20 December, the Conference Agreement on House Resolution 1 – Tax Cuts and Jobs Act, otherwise known as the Republican tax bill, was passed by the US Senate just hours after it had been approved by the House of Representatives. In the next few days, the bill will be signed into law by President Donald Trump.
During the last few months, many different versions of the bill have been circulated, so one can be forgiven for not knowing the exact details of the tax overhaul. Even some lawmakers like Republican senator Bob Corker of Tennessee admitted they had not read the bill. The result? Corker was “shocked” to learn a provision that would enrich him and other real estate magnates had been slipped into the final version of the bill.
So for everyone who has not read the bill in full, here is a concise summary of the costs and benefits of the Republican tax legislation in one chart. It compares the benefits of the tax bill, as measured in higher economic growth, as calculated by the Tax Policy Center, with the anticipated costs in higher budget deficits, as projected by the Congressional Budget Office (CBO).
The Republican Tax Bill in One Chart
Source: Congressional Budget Office (CBO), Tax Policy Center, Fidante Capital
For more from Joachim Klement, CFA, don’t miss Risk Profiling and Tolerance: Insights for the Private Wealth Manager, from the CFA Institute Research Foundation, and sign up for his regular commentary at Klement on Investing.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
Image credit: ©Getty Images/CSA Images/Archive
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