Ramifications of the 2017 Trump tax plan

The proposed tax structure passes on efficiency and stabilisation but fails on equity consideration

The last fundamental US tax changes — mainly tax cuts — were undertaken three decades back during the Ronald Reagan administration, reflecting Arthur Laffer’s idea that lowering tax rates would fetch additional revenue. As it turned out, revenue loss was claimed to be 3 per cent of average gross domestic product (GDP) for 1981-85, the fiscal deficit increased, and the stock market fell. Post-facto, this led George H W Bush to call it “voodoo economics”.

Be history as it may, the Donald Trump White House has proposed a new tax plan by pointing to realities of the prevailing US tax