Economists touted the benefits of the Main Street Tax Plan, saying it would expand the economy by $2 trillion in a decade, at an event at the Hudson Institute on Wednesday.
“The Republican presidential hopefuls are all offering tax plans that would boost the economy, which is encouraging, given that U.S. growth has slowed to a trickle over the past decade,” said Jeffrey Anderson, a senior fellow at the Hudson Institute. “The question is whether any of these proposals are politically viable.”
For instance, Anderson noted that Donald Trump’s tax plan would add $10 trillion to the national debt in over a decade, according to estimates from the Tax Foundation.
Anderson suggested that candidates adopt the Institute’s ‘Main Street Tax Plan,’ which he says would give a tax cut to nearly all Americans.
“The proposal would give a tax cut to nearly all Americans: $2,153 to a single person making $60,000; $2,020 to a couple making $80,000; and $2,055 to a family of four making $95,000,” he said. “The biggest beneficiaries would be middle-class Americans, who would fare twice as well as the top 1 percent.”
Currently, after an individual begins to earn more than $47,751 or a couple begins to earn more than $95,501, the tax rate jumps from 15 to 25 percent. Anderson said that this tax increase hurts people when they are starting to get ahead. Instead, the plan would add a 20 percent tax bracket, which he says will provide tax relief for millions of Americans.
Additionally, the plan would reduce the debt by $679 billion over a decade, increase GDP growth by 7.6 percent in that same time frame, lower the corporate tax rate to 25 percent, and reduce the top individual rate to 33 percent.
“The Main Street Tax Plan would expand the U.S. economy by $2 trillion within a decade,” Anderson said. “That is in the ballpark of growth generated by the Reagan and Kennedy tax cuts.”
This tax plan would also streamline the tax code by reducing the number of taxes. Under the plan, Americans would not have to pay the Medicare payroll tax.
“Republicans have struggled to come up with pro-growth tax plans that plainly benefit the typical American,” says Anderson. “The Main Street Tax Plan focuses on the typical American without picking winners and losers.”