Permanent Tax Reform Gives Businesses Confidence: As Temporary Tax Cuts Expire, GDP Growth Stalls

Tax reform is all about generating faster economic growth. The acceleration creates jobs and puts more money in people’s pockets

But that growth may not materialize, if the changes are set to expire. Individuals and businesses don’t invest as aggressively in the future, if they know that future won’t last. Whether it’s hiring someone new or building a factory, businesses often take years to realize a return on their investments. Temporary tax cuts don't create the same incentive. Instead, they tend to fuel an initial burst of business activity that quickly tapers off, often leaving the economy in worse shape than it was without any tax cut at all. Congress can prevent this by adopting real reforms that don’t expire in a decade or less.