On February 15th, Morgan Stanley economists Michael Feroli and Abiel Reinhart predicted that almost all expiring Tax Cuts and Jobs Act provisions will be extended due to Republican control of Congress in the United States. The JPMorgan team wrote that Trump may also strive to fulfill his campaign promises by ending tips and overtime taxes. Overall, by 2035, the extension of TCJA will increase the US federal debt by approximately $4 trillion to $5 trillion. They estimate that other tax reduction measures, such as removing tips, overtime pay, and social security benefits from taxes, could increase debt by $1 trillion to $6 trillion. They found that even new high tariffs may not be enough to offset the deterioration caused by the extension of TCJA.
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