Chairman Womack: “Tax reform is working”

WASHINGTON – Last week, the Congressional Budget Office (CBO) released its Budget and Economic Outlook for 2018 to 2028. As part of CBO’s annual report, the agency highlighted the positive economic impacts of the Tax Cuts and Jobs Act. Today, House Budget Committee Chairman Steve Womack released the following statement:

“As families and individuals navigate the previous tax-filing system for the last time this Tax Day, the future is promising, thanks to the Tax Cuts and Jobs Act. In addition to a simpler system and lower rates, CBO’s annual baseline, released last week, showed tax reform will continue delivering benefits to the American people,” said Chairman Steve Womack. “As a direct impact of tax reform, unemployment will shrink, wages and income levels will rise, and potential output will grow. CBO expects tax reform to spur greater business investment in the economy accompanied by the creation of approximately 1.1 million new jobs over the next 11 years. Simply put, tax reform is working.”

Background:

On April 9, 2018, the CBO released its Budget and Economic Outlook. This annual report serves as a neutral benchmark from which Congress can measure effects of enacted policies, define funding levels across government, and ultimately, craft a plan for the future.

CBO Budget and Economic Outlook: 2018-2028 Key Findings:

  • CBO highlighted the positive economic impacts of the Tax Cuts and Jobs Act, stating it “will encourage workers to work more hours and businesses to increase investment in productive capital, thereby raising employment, income, and potential output… the increase in after-tax income will boost spending in the near term, boosting actual output…”
  • Largely due to tax reform, CBO expects the economy will grow by 3.0 percent this year (on a year-by-year basis), which would mark the strongest growth since before the Obama Administration.
  • CBO projects new jobs will be created as a direct impact of the Tax Cuts and Jobs Act:
    • Non-farm employment growth is expected to average 0.7 percent across the 10-year budget period.
    • Over the next 11 years, this translates to approximately 1.1 million new jobs.
  • According to CBO, heightened economic activity directly results from tax reform, generating greater demand for labor and higher wages for American workers.
  • Tax reform enables businesses to grow, expand their operations, and invest in their workforce. In response to the Tax Cuts and Jobs Act, more than 500 businesses have already announced higher wages, improved employee benefits, or awarded bonuses.