GOP Tax Plan Uses "Trickle Down Tax Cut" - Hometownstations.com-WLIO- Lima, OH News Weather Sports

GOP Tax Plan Uses "Trickle Down Tax Cut"

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There are two GOP tax plans in the works between the Senate and the House of Representatives. There are two GOP tax plans in the works between the Senate and the House of Representatives.
The idea is known as "trickle down tax cut." The idea is known as "trickle down tax cut."

Two separate bills have passed through the House and Senate and will begin to be smoothed out into one bill.

There are two GOP tax plans in the works between the Senate and the House of Representatives. Both address the same topics with one central idea. The idea is that corporate tax rate would shrink from 35 percent to 20 percent. Thus allowing corporations to invest more, eventually leading to bigger pay checks for the middle class. The idea is known as "trickle down tax cut." This method has been used in the past in the Kennedy, Reagan and Bush Sr. administrations.

"Since then, the Bush tax cut of the early 90's have been disappointing in terms of their economic impact," said David McClough, Associate Professor of Economics at Ohio Northern University. "I would expect the current tax cuts to have more of that. I would expect them to follow along that line more so than what we saw with the Kennedy tax cuts. The current tax cuts are pervasive but, I don't expect them to have the same impact on the supply side."

A conference is set for select members of the House and Senate to hash out the differences in the two plans.

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