Trump’s Tax ‘Reform’ Might Have Backfired

In Economy, Taxes On
- Updated

CURATOR NOTE: This is one in a series of articles, that clearly indicates that the 2017 tax cut did not produce the Republican-touted benefits. While this perspective is known, and the facts such as the GDP growth rate, support it, it is unclear how knowing these facts will change anything. It seems to me that this topic is so complex that it is beyond understanding for many. When we are not able to examine facts because we don’t understand, we tend to look to the source of the “facts” for credibility. That leads us directly back to the Republican base and the Republicans who are afraid of them.

 

The most favorable thing that can be said of President Trump’s 2017 tax cut — whose cost is reckoned at roughly $1.5 trillion over a decade — is that it disappointed. A harsher but perhaps more accurate judgment is that it flopped. It didn’t perform as advertised. This is not just a verdict on the past; it’s also a warning for the future.

The White House and Republican Congress skewed the tax cut toward big corporations. The decline in the top corporate tax rate from 35 percent to 21 percent was expected to “boost economic activity, lead to higher investments and economic growth, and ultimately help bolster wages for working Americans,” as economist Aparna Mathur of the right-leaning American Enterprise Institute wrote in a recent study and blog post.

It didn’t. The investment surge didn’t occur. Although investment did increase, gains were modest and had started during the Obama administration. Most increases preceded passage of the Tax Cut and Jobs Act of 2017, said Mathur, a supporter of the original tax cut.

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