Trump's tax plans

[stpioc]

Ok, after decades of this:



And this:



Do we actually need a tax plan that produces this:



Especially when we know that neither business investment nor growth has increased since the 1980s? Why do we expect a different outcome this time when the labor market is already close to full employment, the Fed is raising rates, inflation is creeping up and productivity growth and the growth of the labor force are much smaller than before. And Trump's immigration and deportation policies might very well reduce the growth in the labor force further:

The effect of immigration on growth of the working age population is even more pronounced as immigrants are usually young relative to the aging domestic population (left panel of Exhibit 2). As a result, net immigration currently accounts for virtually all of the 0.5pp trend increase in the working age population. According to Census projections, the level of the US working age population would actually fall by about 0.2% per year in 2020-2030 in the absence of immigration (Exhibit 2, right panel). The tendency for immigrants to be younger is also reflected in labor force participation data as the participation rate of foreign-born individuals (65.9%) is a bit higher than that of their native-born counterparts (62.2%).

Snap AV: immigration and the US labour force | FT Alphaville