IMF: Trump Tax Reform Will Accelerate Growth in U.S. and Around the World

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The Trump administration’s tax reforms will accelerate global economic growth, according to the latest forecast of the International Monetary Fund (IMF).

Total economic output for the world will grow 3.9 percent in 2018 and 2019, after adjusting for inflation. That would be the strongest year for global growth since 2011 and represents an upward revision of 0.2 percent since the IMF’s forecast in October.

When the IMF released its Global Economic Outlook in October, it assumed that U.S. tax policies would remain unchanged. In other words, it assumed Republican efforts to pass tax reform would fail.

The changes to the U.S. tax code are expected to be responsible for “about half” of the upward revision, the IMF. Much of that will arise from lower corporate income tax rates. The IMF estimates that lower rates will lead to an acceleration of business investment. As well, a larger federal budget deficit will stimulate the economy and boost U.S. growth, according to the IMF. – READ MORE

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A new CNN poll suggests that the tax reform bill which passed late last year has revived Republican hopes of maintaining both houses of Congress in the 2018 mid-term elections.

According to the poll, the difference between Republicans has narrowed to just five points, from ten to fifteen points before the wide-reaching tax cut passed. Now, voters prefer Democrats to Republicans only 49% to 44%.

While the “recovery” is by no means complete — and support is not yet guaranteed — the poll represents a significant change from the summer, when the GOP was struggling to shore up the support necessary to avoid major losses. Democrats are down 7 points from CNN’s previous poll, and Republicans are up 6 points from the same, suggesting a major change in voter sentiment. – READ MORE

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Bank of New York Mellon Corp. (BK) executives said nearly all of this year’s benefits from the new U.S. tax law will go to technology upgrades and its employees instead of shareholders.

That includes a raise in the minimum wage to $15 an hour starting March 1 largely for those who work in the firm’s operations unit. The higher hourly wage will affect about 1,000 of the bank’s 52,500 employees, according to finance chief Mike Santomassimo.

The trust bank estimated the corporate tax changes will save nearly $250 million this year.

The explanation of how Bank of New York Mellon would use its tax savings came on a day when it reported fourth-quarter net income of $1.13 billion, or $1.08 a share, including a $427 million benefit from the new tax legislation. BNY Mellon had earned $822 million, or 77 cents a share, a year earlier. – READ MORE

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