White House says tax cuts could add $1.2T to US economy

WASHINGTON – President Donald Trump’s top economist is doubling down on claims that corporate tax cuts would spark economic growth and boost incomes.

Kevin Hassett is chairman of the White House Council of Economic Advisers. Hassett says the plan to slash the corporate tax rate from 35 per cent to 20 per cent could increase the size of the U.S. economy by $700 billion, to $1.2 trillion over a decade.

Hassett also says academic research suggests the lower rates could slash the U.S. trade gap in half, since companies would have less of an incentive to book their profits overseas.

The new report affirms earlier White House analysis that the lower rates would cause average household incomes to eventually rise $4,000 a year — a claim that drew criticism from many economists.