US tax cut plan to modestly lift economy: Economists

WASHINGTON — The tax cut bill approved by Congress Wednesday would only lift the US economy modestly in 2018 and 2019, economists with JP Morgan said Thursday.

The US Congress on Wednesday finally passed the Republican bill to overhaul the US tax code over three decades, reducing income tax rates for companies and most families.

According to JP Morgan economists, the bill would add a 0.3 percent point to the US gross domestic product (GDP) in 2018 and a 0.2 percent point to the GDP in 2019, as lower tax rates would boost private consumption and business investments.

The US economy expanded at an annual rate of 3.2 percent in the third quarter of the year, according to the revised data released on Thursday by the Commerce Department.

While the tax bill would only slightly boost the economy, it would very likely swell the deficits of the US federal government.

The Committee for a Responsible Federal Budget (CRFB), a bipartisan public policy organization based in Washington, said in a recent analysis that the tax bill could cost about $2 to 2.2 trillion in the next decade, pushing up US public debt to between 98 percent and 100 percent of GDP by 2027.