This has been the big macroeconomic question for the last two years: Will the Tax Cuts and Jobs Act of 2017 reduce deficits and what will happen to the U.S. debt? To simplify, tax revenue comes fr

This has been the big macroeconomic question for the last two years: Will the Tax Cuts and Jobs Act of 2017 reduce deficits and what will happen to the U.S. debt? 

To simplify, tax revenue comes from multiplying a tax rate by the country’s income. The tax rate was cut in 2017. If income stayed the same, tax revenue would fall. But both of the main schools of thought in macroeconomics, the Keynesians and the Neoclassicals, believe that tax cuts will encourage economic growth and increase income (although for different reasons). The question now becomes this: Will income increase so much that tax revenues will increase even though the tax rate is lower? Note that since the tax cut we have seen a strong growth in employment, and very low unemployment rates. If the cut in the tax rate increases tax revenues, the deficit will shrink.

Before the results were in, the answer to this question was unknown. People tried to forecast what would happen. This video shows one point of view regarding predictions on the subject: U.S. Deficit to Surpass $1 Trillion Two Years Ahead of Estimates, CBO Says 

 As of March 2019, enough time has passed that we now have some actual evidence on what is starting to happen. The editorial pasted below, “A February Revenue Surprise,” explains this evidence. There are strong opinions on both sides.

after reading over this material please respond to the question is below:

• Do you think the Tax Cuts and Jobs Act will reduce our deficits? That is, will it increase tax revenue? Explain your answer.

classmate post: please respond to classmate post only 

I don’t think the tax cuts and jobs act will reduce our deficits in the long run.  We may see some short term decreases, but I don’t believe it will last.  I know that I have not seen any decrease in the taxes that are taken out of my paycheck.  I received less of a refund this year than last.  I know a lot of people who received a small refund last year and ended up owing thousands this year.  I think that most likely accounts for the decrease in tax refunds this year.  Even with businesses getting more of a tax break that doesn’t mean that they will hire more workers or give higher salaries to the non-executive employees.  I know that my employer has receive tax cuts and they lowered the possible raise % we could get this year.  The “middle” class is being hit the hardest and they are the ones that would spend if they had the extra money.  Prices are rising but our income is not and I know that j