Agency: Trump's tax cut policy may not boost US economic growth

A new analysis from the Committee for a Responsible Federal Budget (CRFB), a nonpartisan fiscal watchdog group in the United States, warns that extending the tax cuts that are set to expire next year will do little to help economic growth. The CRFB's findings are based on an assessment by the Congressional Budget Office that found that letting the tax cuts expire would significantly increase public fiscal revenue, reducing the cumulative fiscal deficit by $3.7 trillion over a decade. These potential revenue increases would mean less public borrowing, which in turn would stimulate private investment. In the CBO's analysis, this would help make up for the reduction in the labor force caused by the expiration of the tax cuts. "Overall, the two effects largely offset each other, resulting in very small changes in gross domestic product (GDP)," the CBO said. This means that, in the CRFB's view, extending the tax cuts would also have a similar, modest net effect on economic growth. (Jin Shi)