WSJ: The Tax Cuts Will Grow the Economy by Much More than Expected & American Economic Optimism Soars, Breaks CNBC Survey Record

The tax plan was always expected to juice the economy, but the Senate version, which passed after the House approved its bill, had relatively modest short-term stimulus.

While the stock market kept rising in anticipation of a cut, the bond market hardly budged. The bill unveiled Friday front-loaded more than $200 billion in stimulus for next year. Economists had been penciling in a boost of about a third of a percentage point next year. Now that is looking way low.

Some of the pro-growth changes include eliminating any delay to the corporate tax cuts, lowering of the top individual rate, lowering rates for most taxpayers, and increasing the child tax credit. The latter is particularly important because middle-class households are “more likely to spend extra income than the rich.”

The tax bill could increase GDP by 1.3 percent, Lahart writes.

That’s an additional full percentage point gain from what economists had been expecting based on earlier bills.

American Economic Optimism Soars, Breaks CNBC Survey Record