Non-partisan, non-profit research group Tax Foundation pointed out cracks in Secretary Hillary Clinton’s tax plan, noting that it could cause a 2.6% drag on 10 year gross domestic product (GDP), according to models it developed.
Further, the foundation projected that the Democratic presidential nominee’s plan could pull down wages by 2.1%, capital stock by 6.9% and jobs by almost 700,000.
Alan Cole, an economist for the foundation, said they did the number crunching based on projected growths.
Further, the plan, which provides for stratified taxation based on earnings, is expected to generate $1.4 trillion to $663 billion in revenues over the next decade. “There’s no real tax reform,” Cole explained. “There’s kind of nibbling around the edges, provisions to add revenue here. There’s no broad-base tax relief.”
In contrast, Republican nominee Donald J. Trump’s plan, which the foundation examined last month, is expected to increase GDP by a projected 6.9% to 8.2%. Around 1.8 to 2.2 million jobs are expected to be added to the economy, but tax revenues are seen to shrink from $5.9 to $2.6 trillion, depending on economic performance.
Cole noted that Trump’s plan could spur growth if he could find appropriate spending cuts. “That doesn’t seem too likely,” he said. “He might not be putting in enough spending cuts to make it feasible.”
