Economic Growth Accelerates Faster with Permanent Tax Changes
Permanent changes to the tax code spur significantly more economic growth than a temporary rate cut. By permanently lowering the corporate rate to 15%, for example, the gross domestic product in the U.S. will expand by 3.9% more than it would under the current tax code over the next decade, according to the nonpartisan Tax Foundation. But if Congress passes a temporary rate cut that expires in 10 years, economic growth won’t be much better than it would under the current system. In fact, a temporary rate cut would actually generate slower growth in the final years than the existing corporate tax rate.