Americans are starting to see some of the impact of the tax plan in their paychecks, and polls are showing more support for it in recent weeks. But some tax experts say it may be too soon to declare the tax plan a winner.
Officials at one Onondaga County business say the tax plan is already making a big difference for its 800 employees. Suit-Kote president Frank Suits announced last week that his company is beefing up employees retirement, and increasing pay by two percent. He also said the new tax structure makes it easier to invest.
“We can plan our investments both short and long term, and look at a broader scope of projects that we couldn’t have considered in the past,” said Suits.
But Len Burman, a professor at Syracuse University’s Maxwell School and a co-founder of the Tax Policy Center, is among those who say it is simply too soon to gauge the impact of a plan that cuts corporate tax rates, income tax rates, doubles the standard exemption, and eliminates personal exemptions.
“We won’t really know the effect of the tax plan is for several years when we have data that we can try to measure the effect of the tax plan separate from other factors going on in the economy at the same time,” said Burman.
He said the bonuses and boosted retirement accounts many companies tout may not have anything to do with the tax law, because the economy is near full employment, and companies are doing what they have to do to retain workers. He also said it’s unclear how the potential of adding more than a trillion dollars to the national debt will impact the economy.
“Because if interest rates go up, that’ll make it harder for businesses to invest, for people to buy homes and cars, and that could ultimately put a drag on the economy,” he said.
In the end, Burman believes there will be some kind of collateral damage from cutting taxes, and not cutting spending at the same time.
“It obviously would be great if you could cut taxes and not have it cost anything. But it just doesn’t work that way,” he said.