7 Oct 2021 7:47 am
You roamed Google for a week to come up with James Pethokoukis?DeezerShoove » 07 Oct 2021, 6:17 am » wrote: ↑ Did the Trump tax cuts work? The answer may not be what you think.
AEIdeas
May 19, 2021 By James Pethokoukis
A common justification for raising corporate tax rates is that cutting tax rates back in 2017 didn’t work so well. So whether for reasons fiscal or egalitarian, it’s good policy to reverse some or all of President Trump’s Tax Cuts and Jobs Act.
Certainly a cursory glance at the statistics — which is what the “they didn’t work” claim is based on — shows GDP growth, productivity, and business investment about the same heading into the pandemic. Not much sign of the sharp and sustained surge that some proponents promised. President Trump, for instance, said the tax cuts would be “rocket fuel” for the economy. But as The Wall Street Journal concluded in early 2020: “Early growth in business investment seems to have faded; overall economic growth rose before pulling back again. Cross-border investment patterns have changed only modestly.” (It should be noted that the most recent productivity stats show 2017 and 2018 did see an uptick in the pace of productivity growth, though hardly a boom.)
A couple things to keep in mind, however: For starters, many GOP politicians and pundits argued for the tax cuts in a way most economists didn’t. While the former said the tax cuts would radically alter investment incentives and unleash a flood of corporate cash into the domestic economy from overseas holdings, the latter made arguments more like this one from AEI economist Alan Viard [bold by me]:
Accurate, but less catchy. But the point here is that the most common attack on tax cuts is really addressing a political argument rather than an economic one. Moreover, tax cut critics almost always ignore the impact of Trump’s other big economic “achievement” — the trade wars. As AEI economist Kyle Pomerleau puts it: “Trump decided to run two experiments at the same time: A tax cut and a trade war. And those are somewhat offsetting. CBO thinks they’re almost entirely offsetting in some years. So just looking at the economy, it looks like nothing happened, so it is hard to come to any conclusion from just observing.”
One reason the trade wars may have undercut the tax cuts was because of the massive business uncertainty they created. In a new analysis by Hites Ahir, Nicholas Bloom, and Davide Furceri, the researchers note the following:
And as economist Steven Davis — a co-creator of the Economic Policy Uncertainty Index with Bloom and Scott Baker — described the effect of the trade wars back in 2018, companies faced “a tremendous, Trumpian upsurge in anxiety and uncertainty.”
In other words, the conclusion that the Trump tax cuts failed should not be offered with anywhere near the level of certainty that it frequently is. Indeed, that the Biden administration is not proposing a complete rollback suggests even it sees some value in them.
Do you have any idea who he is?
They trot his *** out to bleat apologias for reactionary policy failures.
I'll take that **** apart this afternoon, but while you wait, here's some unqualified data.....from a professional.
The Tax Cuts and Jobs Act, introduced at the end of 2017, was a complex tax reform that included tax cuts for individuals and businesses. One of the anticipated effects of the reform was to stimulate investment (Council of Economic Advisers, 2017). Business investment, however, grew more slowly after the tax reform than before it (figure 1). The average quarterly growth rate of business investment was 2.8 percent in 2018–2019, lower than the rates in 2016–2017 (4.0 percent), 2013–2017 (3.9 percent), or 2010–2017 (5.5 percent). Even taking into account that other economic factors, such as changes in trade policy and a global economic slowdown, may have held investment down, these data suggest that the stimulus provided by the tax reform was not large.
https://www.clevelandfed.org/newsroom-a ... tment.aspx