Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

As I pointed out yesterday, the projection of an investment boom was never very plausible in any case, but for it to make any sense at all, the tax cuts have to be permanent.

"As I pointed out yesterday, the projection of an investment boom was never very plausible in any case, but for it to make any sense at all, the tax cuts have to be permanent." (Photo:  Yuri Keegstra/Flickr/cc)

Republican Tax Plan Goes for Temporary Cuts and Permanent Lies

The claim of a $1.5 trillion growth dividend can be seen for what it is: a number snatched out of the air to claim the tax cut won't increase the deficit.

The Washington Post reported that Republicans in Congress are now considering making their tax cuts temporary, so as to reduce their cost over the 10-year budget horizon. The paper neglected to mention that this change would completely undermine the basis for the claim that the tax cut will lead to boom in investment and growth.

This alleged boom is the basis for both the claim that the average family would get $4,000 from the tax cut and that additional growth would generate $1.5 trillion in revenue over the next decade. As I pointed out yesterday, the projection of an investment boom was never very plausible in any case, but for it to make any sense at all, the tax cuts have to be permanent. 

The Republicans' argument was that lower tax rates would increase the incentive for companies to invest. But if companies anticipate that the tax rate will return to its current level after a relatively short period of time, then the tax cut will provide little incentive. This means there is no basis for the assumption of a boom.

In the case of a temporary tax cut, the claim that average families will see a $4,000 dividend from higher pay makes no sense. And the claim of a $1.5 trillion growth dividend can be seen for what it is: a number snatched out of the air to claim the tax cut won't increase the deficit. 


This work is licensed under a Creative Commons Attribution 4.0 International License

... We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

'Biden's Oily Christmas': Climate Campaigners Call Out Public Lands Giveaways

"His Interior Department has plowed forward with new oil and gas lease sales that wreck our public lands and exacerbate climate change—all while enriching the CEOs of big oil corporations."

Jessica Corbett ·


'Global Empire of the US Christian Right': Dark Money Fuels Attacks on Abortion Rights Worldwide

The findings of a new investigation, said one observer, "further demonstrate the growing trend of religious extremists forging cross-border alliances" to gut abortion rights.

Jake Johnson ·


Public Health Experts Slam 'Grossly Inadequate,' Industry-Friendly Covid Test Reimbursement Scheme

"We need this administration to be courageous," said one physician. "This is not it at all."

Julia Conley ·


Progressive Lawmakers to Biden: 'Cancel Student Loan Debt.' All of It. Now.

"Student loan payments resume in 61 days. Borrowers are NOT ready or able to restart them," said Democratic Congresswoman Pramila Jayapal.

Andrea Germanos ·


'Unconscionable': Missouri Accused of Burying Analysis Showing Mask Mandates Save Lives

The findings were only made available this week due to a public records request by a local independent news outlet and the Documenting Covid-19 Project.

Kenny Stancil ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.


Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo