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20-Sep-2017 05:02

Half of the budget is entitlement programs, and 32% of those go to the poorest quintile, so they would get an extra billion. But it’s hard to come up with remotely plausible numbers in which the poor and working-class are better off with the tax bill than without it.I think the assumptions I plugged in were overly generous: the bill won’t really increase growth 1%, and although poor people have 3% of income they get much less than 3% of economic gains.Point 2 is why I stress the economists saying that the gains from cutting corporate taxes really won’t have that much effect on growth. If the government were a perfect effective altruist, it would be no contest – them having the money would be thousands of times more effective than random corporations (or even random middle-class people) having it.Even if the government were to give the money as a tax break to the working classes, it still seems really obvious to me that the increased utility swamps any effect from higher economic growth.She says “Alice’s work is the most important thing in this town, but taxing Bob destroys wealth for no reason.Some of the town elders support tax breaks for Bob, and others support tax breaks for Alice.We could give the break to Bob, and have a nominally better economy, but it would just lead to more people buying virtual cats.It could be that the extra two dollars’ of wealth destroyed by Bob’s taxes was some sort of useful machinery, and so taxing Bob harms economic growth.

Or should we be comparing it to the best possible use for that money?

But although I agree there’s a multiplier, I don’t know if it’s this big.