Effects of the new tax system

A big part of the tax reform includes lowering the business tax rate, cutting corporate tax rates. There are mixed opinions on this new reform. But national economic council director Gary Cohn seems to think it will create quite a bit of stimulation into the economy. Gary Cohn has a long history involved in the corporate world. And just last year, he was advocating for businesses to relocate to a place with a more desirable tax system. 

Now he believes that Americans can keep their large companies here at home. This will create jobs because will the lower taxes the companies will be able to afford to pay workers wages. The money will be held here, and part of the profits made will be reinvested into stocks. And any earnings on those stocks will have to pay the 20% tax, making up for the losses in the cuts from the actual business. The increase in the velocity of investment will outweigh the loss of taxes being collected from the businesses themselves.

Now on the contrary, there is a chance that the new profits in the economy will not be invested in the way that we anticipate, and we run the chance of the government running a larger deficit.

https://www.cnbc.com/2017/11/09/gary-cohn-a-year-ago-i-was-advising-companies-to-move-out-of-the-us.html