Biden administration economist Jared Bernstein says that his "BS alarm has been triggered" by Republicans' recent justifications for their tax cut plans.
Writing on his Substack page, Bernstein accuses Republicans of making "absurd" projections that extending the 2017 tax cuts will increase gross domestic product growth by a full percentage point.
"Your best guess should be for the extension to have about zero impact on growth," Bernstein explains. "Why? Because, in technical terms, it generates no new fiscal impulse. In plain terms, it doesn’t change anything in terms of what people are already paying or not paying in taxes. It’s an extension of a bunch of tax parameters that have been in the economy since the TCJA took effect in 2018."
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Bernstein goes on to describe the extension of the 2017 tax cuts as "the worst of both worlds" as they will provide little in the way of fiscal stimulus while also worsening America's fiscal situation.
"They’ll have some new tax cuts in there, and those will generate new fiscal impulse, but the magnitude of those new revenue losses will be a sideshow to the TCJA extension, and I don’t think you’ll find an economist who’s not be paid to believe otherwise agree that there’s a full extra percent of real GDP growth in there," he concludes.