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Tax cut could push the U.S. into recession, says Paulsen

December 07
15:30 2017

The Republican tax cut could not come at a worse time, unnecessarily overheating an aging economic recovery that’s already operating near full employment, said Jim Paulsen, chief investment strategist at Leuthold Weeden Capital Management.

“If it is a stimulative tax cut, it will hasten inflation and prematurely bring a recession,” Paulsen said in a speech Wednesday.

Both the House and Senate tax overhaul bills under consideration would cut taxes for businesses and many individuals. Households can expect to save an average of $1,200 in 2019 based on the Senate’s proposed overhaul, as tracked by the Tax Policy Center, and the largest tax cuts will go to the highest-income earners. A conference committee is working this week to combine the two versions into what they hope will be passable legislation to send to President Donald Trump.

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