Alec Phillips and Blake Taylor, analysts on Goldman Sachs’s U.S. economic analysis team, said the Senate GOP tax bill’s impact on the economy beyond 2020 would be “minimal” and could actually be “slightly negative.”
“We have increased our estimate of the growth effects of the legislation slightly, to around 0.3 [percentage points] in 2018 and 2019,” the Goldman economists wrote in a note to clients on Monday, according to Business Insider.
“This reflects the slightly larger amount of tax cuts in the Senate plan following revisions, and our expectations regarding the eventual compromise.”
“We note that the effect in 2020 and beyond looks minimal and could actually be slightly negative,” the note added.
The Senate early Saturday voted to pass legislation to reform the federal tax code, which would temporarily lower the tax rates for individuals through 2025, while permanently cutting the corporate tax rate from 35 percent to 20 percent.
The bill would also repeal ObamaCare’s individual mandate.
The Hill added:
The House and Senate are expected to work out the differences between their tax bills in a conference committee, with the goal of getting a bill to President Trump’s desk by Christmas.
Goldman Sachs said last month that the GOP tax-reform plan would only increase economic growth by 0.1 to 0.2 percentage points over the next two years.
Some Republicans have argued the bill would boost gross domestic product growth by 0.4 percentage points a year.
The nonpartisan Tax Policy Center said the bill would boost GDP growth by 0.002 percentage points a year, while the Penn-Wharton Budget Model found that the legislation would boost growth by 0.03 to 0.08 percentage points a year.