Debate on Taxes and Fiscal Policy
Discussions are ongoing about taxes as the government "allowing" citizens to keep money, tying into broader fiscal policy debates [https://x.com/SocraticQuant/status/2032464636675821821]. This relates indirectly to discussions on GDP and inflation [https://x.com/SocraticQuant/status/2032464636675821821].
The ongoing debate includes discussion of the "One Big Beautiful Bill Act" (OBBBA) of 2025 and potential follow-up reconciliation measures. Republican lawmakers are considering a second reconciliation bill, though White House support is uncertain. This could address healthcare provisions, adjustments to capital gains treatment for home sales, and the treatment of Americans living abroad. The Economic Opportunity Funders and the Tax Equity Funders Network are hosting a Budget and Tax Briefing in late March to analyze the federal and state budget and tax landscape. Discussions will include strategies to shape budget and tax fights, create equitable revenue systems, and improve public benefits access. They will also address the role of funders in meeting current challenges and supporting inclusive solutions. Goldman Sachs Research forecasts US GDP to expand by 2.5% in 2026, exceeding the consensus estimate of 2.1%. This growth is attributed to business and personal tax cuts from the OBBBA, offsetting the drag from increased tariffs. Core personal consumption expenditures (PCE) inflation is projected to fall to 2.1% by December. The Congressional Budget Office (CBO) projects that revenues in 2026 will total 17.5% of GDP, surpassing the 50-year average. Real GDP growth in 2026 is projected to be stronger due to the effects of the 2025 reconciliation act. Inflation is expected to slow from 2.8% in 2025 to 2.7% in 2026.
