The need for massive tax cuts proposed by the Trump administration is being questioned by some economists. For tax payers, any tax cut is seen a benefit and it would be hard to find someone who is opposed to paying less taxes. But if you ask some economists they don’t see it that way.
Recent numbers released show that the U.S. economy has grown at 3 percent for back to back quarters for the first time in three years, unemployment is the lowest in 16 years, and consumer sentiment is at its highest since early 2004. With all this positive economic news, some are questioning why we need the huge tax cuts that are being proposed by the Trump administration.
Trump has said that he wants to push through tax reform which would modernize an outdated tax code and at the same time provide tax cuts to individuals and businesses.
Some economists are questioning the timing of these tax cuts and reforms however, citing that the economy is healthy and seems to be growing. Some believe that massive tax cuts at this time would only add to America’s huge debt.
Some have even gone as far as to say that it is completely unnecessary to stimulate the economy with the unemployment rate at a low 4.2 percent. This kind of thing is something that is normally seen during times when the economy is weak.
The Trump administration is known for going against the grain on many issues and this is just another example. This is somewhat of a gamble as some concede that the move could boost wages and further stimulate and strengthen the economy. Still, some economists fear that stimulus at this point in the economic cycle could be too much of a good thing.
The proposed tax reform is still being debated and by no means has it been approved. Only time will tell how much of a good thing this really is.