The IMF says neither Laffer or trickle down will work in the case of US tax cuts

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The IMF is quite sure it knows who would gain from the US tax cuts that Donald Trump is intent on delivering. It has done the research and published its finding, of which it says:

First, although we find that tax cuts provide a one-time boost to GDP, consumption, and investment, these effects are never strong enough to prevent a loss of revenue. Thus, tax cuts would need to be financed either through increasing the public debt, cutting spending, or by raising revenues from other taxes. Since we aim at obtaining better distributional outcomes while still preserving some modest upside to growth, we focus on financing the cuts with a shift from personal income taxes to consumption taxes, combined with an expansion of the earned income tax credit to protect the poor.

Second, we find that personal income tax cuts can benefit lower income groups, even if those at the bottom of the earnings scale do not directly receive a tax cut. Our economic model predicts that when tax cuts are targeted at middle (or high) income groups, these groups will spend some of the tax savings on (non-tradable) services, which are typically provided by lower-income people. Wealthier groups, on average, dedicate a larger share of their consumption expenditures to services. Consequently, when wealthier people pay less in taxes, their spending on services increases, raising demand for–and the wages of–low-skilled labor.

Third, our analysis reveals a fundamental tradeoff between growth and income inequality, depending on who gets the tax cut. In our simulations, while tax cuts for higher income groups may generate greater gains in GDP through higher investment and labor supply, they also exacerbate income polarization and inequality, both already at historical highs. Even accounting for the fact that rich people might consume more goods and services produced by people in the lower part of the income distribution, and allowing for an increase in the earned income tax credit to protect the poor, the income gap would still widen substantially if taxes were cut for higher income groups. On the other hand, a tax cut targeted at middle-income groups would help reduce income disparity and polarization, but might provide smaller growth dividends.

So, let me summarise that. First, the tax cuts, however they happen, will cut US revenues. So, no Laffer effect then.

Second, the impact is not always just in tax paid: resulting changes in spending patterns do have to be taken into account as well when assessing winners and losers.

Third, even doing that these tax cuts (which are designed to mainly benefit the well off) would not generate nearly enough 'trickle down' to prevent substantial increases in already significant inequality.

In other words, what Trump is proposing fails to make any macroeconomic sense for the USA and only makes sense at a micro level for a tiny proprtion of US citizens. There is no surprise in that, but it's welcome that the IMF is willing to say it and in the process make clear that neither Laffer or trickle down work.