Young Americans for Freedom hosted University of Wisconsin economics professor Noah Williams Tuesday evening to discuss the recent tax reform.
The Center for Research on the Wisconsin Economy strives to understand forces driving economic outcomes and make economic research accessible to policymakers, businesses and communities both in Wisconsin and throughout the U.S.
In the media, the recent tax reform has been portrayed as only benefitting big business, Williams said. This is an incorrect perception because individuals will also benefit in the long run.
“Much of the media and Democratic coverage focused on expiration of personal tax cuts leading majority of people to mistakenly believe their taxes would be increased initially,” Williams said.
Williams said while more permanent changes occurred on the business side, including huge reductions in corporate taxes, the U.S. went from having the highest tax rate to slightly below average.
High income tax states were also subsided, resulting in an increased outflow of high income individuals from states like Illinois, Williams said. Child tax credit also doubled, going from $1,000 to $2,000.
Williams believes the new tax reform will have a positive impact on everyone in the long run.
“The main economic criterion for evaluating the impact of taxes is efficiency,” Williams said.
It is important to look not only at the tax reform’s impact on revenue, but the potential it holds for Wisconsin’s growth as a state, Williams said. There is a projected 2 percent income increase across the board in Wisconsin with the new tax reductions.
Looking at a bigger picture, Williams also emphasized the importance of remembering the U.S. is operating in a world in a world economy, and that what goes on in the U.S. economy doesn’t affect the world economy that much.
For Americans in general, this tax reform was not just a reform but an overall reduction, Williams said. Its benefits will be felt by individual families who need it.
“The tax reform’s proposed name was cuts, cuts, cuts,” Williams said.