Josh Bivens reports on a new Economic Policy Institute (EPI) report on extending President Trump’s low tax rates for the rich and corporations, which the EPI says will hurt Working Families and include a number of painful trade-offs.

Key findings of the report include:

The U.S. Fiscal Gap - How much taxes need to be raised or spending cut to keep public debt stable as a share of Gross Domestic Product (GDP), which was entirely created by the Republican tax cuts of 2001, 2003 and 2017.

The Tax Gap - The amount of taxes owed but not paid each year - is currently larger than the overall fiscal gap.  It is driven by the richest U.S. households and businesses cheating the law and underpaying taxes.

Extending the expiring provisions of the 2017 Tax Cuts and Jobs Act (TCJA) would increase the fiscal gap by nearly 50% - from 2.1% to 3.3%.

No matter how these tax cuts are financed, the result will hurt most Working Families - especially low-income households.  The most damaging way to finance TCJA extensions would be with spending cuts for programs like SNAP or Medicaid.

Given today’s historically low unemployment rate, deficit-financed tax cuts are more likely to put a drag on growth going forward.

Why This Matters: If these tax cuts for the rich are financed by large spending cuts, this would greatly damage current incomes and future opportunities for the most vulnerable families in the U.S.  Cuts this large would also, all else equal, drag sharply on economy-wide spending, reducing it by roughly $600 billion, or around 2% of overall GDP.  This drag would be large enough to force the Federal Reserve to cut interest rates essentially back to zero to avoid a recession, giving the Fed no further room to cushion the economy against other shocks.

To Read This Labor News Story In Its Entirety, Go To: There will be pain: Continuing low tax rates for the rich and corporations will hurt working families | Economic Policy Institute

Click Here To Read The EPI Report.