Economic Outlook and Economic Policy in the United States
The Administration's Tax Cut Proposals Will Strengthen Short-Term and Long-Term Growth
R. Glenn Hubbard is the
immediate past Chair of the
Council of Economic Advisers.
Currently, he is the Russell L.
Carson Professor of Economics
and Finance and Academic
Director of The Entrepreneurship
Program at Columbia
University. Prior to joining the
Columbia faculty in 1988, he taught at Northwestern. He received his Ph.D. in economics
from Harvard in 1983. He has also served as a
visiting professor at Harvard and the University of
Chicago and as a John M. Olin Fellow at the National
Bureau of Economic Research, where he remains a
research associate. From 1991-1993, he was Deputy
Assistant Secretary (Tax Analysis) of the U.S. Treasury
Department.
The current recovery remains vulnerable, with unusually weak investment and job creation for the recovery phase of a cycle. The Administration’s tax proposal mitigates risk of weak short-term growth while enhancing long-term growth. Of particular note for the long run is the reduction of the cost of capital to business by reducing double taxation of corporate earnings – a tax whose burden falls heavily on workers. Effects of the tax plan on federal deficits will not be substantial enough to place a long-term burden on the economy.