US President-elect Donald Trump is pushing for tax cuts to be renewed as a way to boost the country's economic growth.
However, recent findings from the Committee for a Responsible Federal Budget (CRFB) suggest that the impact of these measures may be more limited than expected.
The CRFB said that renewing tax cuts, especially for individuals, will not have a significant impact on Gross Domestic Product (GDP) growth, with corporate tax cuts approved in 2017 already being extended.
While Wall Street remains optimistic, economists warn that without significant spending cuts, these tax cuts could worsen the US deficit, which hit a record $1.83 trillion last year, up from $1.7 trillion the year before.
In addition, the US deficit for the first two months of the current fiscal year has reached $624 billion, with daily borrowing rates reaching $10 billion.
Extending the tax cuts is expected to add $4.6 trillion to the deficit over ten years, compared to Congressional Budget Office (CBO) projections that show that allowing the tax to expire would reduce the deficit by $3.7 trillion over the same period.
However, several economic models suggest that these tax cuts may have only a small impact on GDP, with the benefits far outweighing the costs.
Will Trump's tax cuts actually stimulate continued economic growth, or instead simply add to the growing fiscal pressure?
