Stephen Gordon sorts through the corporate tax cut rhetoric.
Stephen Gordon sorts through the corporate tax cut rhetoric.
If the CIT cuts go through and are later rescinded, we will not see a recession in which some 233,000 people lose their jobs. Instead, long-run incomes will be about 1.4% lower than they otherwise would have been. I think rescinding the CIT cut would be a mistake, and that it will cost less than the advertised $6b figure. But it wouldn’t be the worst mistake we’ve seen in the last five years.