After 2 Years, Trump Tax Cuts Have Failed To Deliver On GOP's Promises

  
Via:  ender  •  one month ago  •  44 comments

By:   SCOTT HORSLEY

After 2 Years, Trump Tax Cuts Have Failed To Deliver On GOP's Promises

S E E D E D   C O N T E N T




Two years ago Friday, Republicans in Congress   passed a sweeping tax cut . It was supposed to be a gift-wrapped present to taxpayers and the economy. But in hindsight, it looks more like a costly lump of coal.

Passed on a party-line vote, the tax cut is the signature legislative accomplishment of President Trump's first term. He had campaigned hard for the measure, promising it would boost paychecks for working people.

"Our focus is on helping the folks who work in the mailrooms and the machine shops of America," he told supporters in the fall of 2017. "The plumbers, the carpenters, the cops, the teachers, the truck drivers, the pipe-fitters, the people that like me best."

In fact, more than 60% of the tax savings went to people in the top 20% of the income ladder, according to the nonpartisan  Tax Policy Center . The measure also slashed the corporate tax rate by 40%.

"It will be rocket fuel for our economy," Trump promised.

Boosters of the tax cut insisted the economy would grow so fast, it would more than make up for the revenue lost to lower rates.

"The tax plan will pay for itself with economic growth," Treasury Secretary Steven Mnuchin said.

It hasn't worked out that way.

"It was unbelievable at the time, and it's proven to be absolutely untrue," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "The tax cuts were never going to — and have not — come anywhere close to paying for themselves."

Corporate tax revenues fell 31%   in the first year after the cut was passed.   Overall tax revenues have declined   as a share of the economy in each of the two years since the tax cut took effect.

"Not surprising, if you cut taxes, you get less in revenues," MacGuineas said. "And what we've been doing at the same time is we've been increasing spending. And no surprise, our deficit has exploded."

The   federal deficit this year   was $984 billion — an extraordinary figure at a time when the country is not mired in recession or widespread war.

The tax cut also failed to produce a permanent boost in economic growth, despite promises from Republican supporters.

"After eight straight years of slow growth and underperformance, America is ready to take off," Senate Majority Leader Mitch McConnell said when the tax cut passed two years ago.

In fact, the economy   grew 2.9%   last year — exactly the same as in 2015.

The tax cut, along with increased government spending, did give a short-term lift to the economy and businesses temporarily boosted investment. But the rocket fuel burned off quickly. Business investment declined in the last two quarters.

"There was an acceleration in terms of momentum for business investment, but it was rather short-lived," said Gregory Daco of Oxford Economics. "A year further down the road, we're really not seeing much of any leftover of this fiscal stimulus package."

Hampered in part by the president's trade war, the economy is projected to grow only about 2% this coming year. That's below the administration's target of 3% and slightly below the average growth rate since 2010.

To be sure, the stock market is booming, and unemployment is   near record lows . But while   most Americans give the economy high marks , that doesn't extend to the tax cut. A   Gallup Poll   last tax season found only about 40% of Americans approved of the cut while 49% disapproved.

Even though experts say most workers did get a bump in their take-home pay, it was largely invisible to many taxpayers. Only about 14% of those surveyed by Gallup believe their taxes went down. (That figure includes 22% of Republicans, 12% of Democrats and 10% of independents.)

"For millions of middle-class Americans, it is not a very happy anniversary," said Sen. Ron Wyden, D-Ore.

Wyden, the top Democrat on the Senate Finance Committee, said while wealthy Americans are celebrating their tax savings from the past two years, working people feel like an afterthought.

Perhaps it's an acknowledgement of that sentiment that the president is now talking about another round of tax cuts, after the 2020 election. "We're going to be doing a major middle-income tax cut, if we take back the House," Trump promised in November.

The president made   similar promises before last year's midterm election . But the follow-up to his 2017 tax cut never materialized.

Photo: President Trump prepares to sign the tax legislation in the Oval Office on Dec. 22, 2017. The GOP tax cut did not pay for itself, as promised, nor did it deliver a sustained boost to economic growth.

Chip Somodevilla/Getty Images


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Ender
1  seeder  Ender    one month ago

Colour me not shocked...

 
 
 
Citizen Kane-473667
1.1  Citizen Kane-473667  replied to  Ender @1    one month ago

Me either. The only way to put more money in the average Taxpayers pockets is by eliminating corporate taxes all together (with the exception of VAT taxes) and raising income taxes on Capital Gains and on long and short term investments.

 
 
 
Ender
1.1.1  seeder  Ender  replied to  Citizen Kane-473667 @1.1    one month ago

Corps barely pay anything now. A bunch of them zero out and do pay nothing.

I don't think you would ever get them to raise capital gain tax.

I have read from several people that during times like this when we have had ten years of growth, would have been the time to start tackling debt. Not keep lowering taxes and exploding the debt.

It takes away leverage they would have had during the next downturn.

 
 
 
Citizen Kane-473667
1.1.2  Citizen Kane-473667  replied to  Ender @1.1.1    one month ago
Corps barely pay anything now.

True, but what they do pay is just passed along to the consumer by way of higher prices, so no matter how we slice it, we still end up paying the taxes for them.

I don't think you would ever get them to raise capital gain tax.

Not when the Rich are running the country!

 
 
 
Vic Eldred
1.1.3  Vic Eldred  replied to  Citizen Kane-473667 @1.1    one month ago

The amazing thing about it is that this article seems to be released to counter many that are giving the President credit for that tax cut:

"Two years later the data show that investment has increased, with wages and job participation rising"

https://www.wsj.com/articles/tax-reform-has-delivered-for-workers-11577045463


im-138607?width=620&size=1.5

 
 
 
1stwarrior
1.1.4  1stwarrior  replied to  Vic Eldred @1.1.3    one month ago

Wages have increased??  Maybe for the working folks, but sure as hell not for we retirees.

Got my notices today from OPM and SS telling me how great my pay was and then listed the 1.6% OPM COLA increase and the 1.6% SS COLA increase and the increased insurance costs and - FRIGGIN' WOW - I'm gonna get an "extra" $41.00 a month.  Guess that's supposed to off-set the 18.6% increase in insurance premiums, eh?

 
 
 
Texan1211
1.1.5  Texan1211  replied to  1stwarrior @1.1.4    one month ago

Wages are what one earns for performing work.

No need to confuse wages with your retirement benefits.

SS often has increases--both in benefits paid and in insurance costs.

 
 
 
Ender
1.1.6  seeder  Ender  replied to  Vic Eldred @1.1.3    one month ago

512

 
 
 
1stwarrior
1.1.7  1stwarrior  replied to  Texan1211 @1.1.5    one month ago

And, retirement benefits are earned based on wages earned.  Seems to me that, if wages receive a COLA, then retirement benefits should receive the same COLA.  Kinda like being slapped in the face for retiring after over 30 + years of being a wage earner.

 
 
 
Vic Eldred
1.1.8  Vic Eldred  replied to  1stwarrior @1.1.4    one month ago

Lol, I know, I saw it. It dosen't offset much.

 
 
 
Vic Eldred
1.1.9  Vic Eldred  replied to  Ender @1.1.6    one month ago

You really had to dig to find a reduction in growth of something.

 
 
 
Ender
1.1.10  seeder  Ender  replied to  Vic Eldred @1.1.9    one month ago

Dig? No. I also didn't post something behind a pay wall.

 
 
 
Vic Eldred
1.1.11  Vic Eldred  replied to  Ender @1.1.10    one month ago
behind a pay wall.

Why don't you explain that.

 
 
 
Ender
1.1.12  seeder  Ender  replied to  Vic Eldred @1.1.11    one month ago

The WSJ article you posted, one needs to have a subscription to read.

 
 
 
Vic Eldred
1.1.13  Vic Eldred  replied to  Ender @1.1.12    one month ago

That is the problem with certain publications. With the WSJ you don't even get a few free articles. However, I think you might agree with me that most people regard the economy in a personal way. If it benefits them they are likely to re-elect the incumbent. I don't think many voters evaluate the economy based on a chart like yours on "nonresidential investment growth."  Remember Reagan's question - "Are you better off now than you were four years ago?"  That still is the prevailing motivation for voters.

 
 
 
Ender
1.1.14  seeder  Ender  replied to  Vic Eldred @1.1.13    one month ago

Yeah that bugs me. Some will give you one article then block it.

True yet I think most people are around the same. As long as there is no down turn.

 
 
 
Vic Eldred
1.1.15  Vic Eldred  replied to  Ender @1.1.14    4 weeks ago
I think most people are around the same.

It won't be long. We will know that answer.

 
 
 
Vic Eldred
1.1.16  Vic Eldred  replied to  Ender @1.1.6    4 weeks ago

EMaCNiPX0AA0OEz?format=jpg&name=small

 
 
 
Ender
1.1.17  seeder  Ender  replied to  Vic Eldred @1.1.16    4 weeks ago

I wonder if that can be credited to local and city ordinances raising minimum wages.

 
 
 
Vic Eldred
1.1.18  Vic Eldred  replied to  Ender @1.1.17    4 weeks ago

It sounds like that's where you would rather place the credit.

 
 
 
Ender
1.1.19  seeder  Ender  replied to  Vic Eldred @1.1.18    4 weeks ago

It cannot be discounted.

In 2019, the minimum wage rates of 21 states and Washington, D.C., increased. The size of increases ranged from $0.05 in Alaska to $1.40 in New Jersey. The statewide minimum wages ranged from $12.00 in California, Massachusetts, and Washington (and $14.00 in Washington, D.C.) to $5.15 in Georgia and Wyoming. In New York and Oregon, state laws provide for   regional minimum wages . In metropolitan   Portland, Oregon , the minimum wage increased from $12.00 to $12.50 on July 1, 2019. In   New York City , the minimum wage increased from $13.00 to $15.00 for certain employers on December 31, 2018.

Of the 21 states with increases in 2019, 11 (52 percent) of the increases were due to voter-approved ballot initiatives. Ten (48 percent) of the increases were due to legislative bills, with two of the increases (California and Massachusetts) resulting from compromises between legislators and ballot initiative campaigns and one (Michigan) resulting from an amendment to an indirect initiative. Eighteen (86 percent) of the wage increases were scheduled to occur on January 1, 2019. One was scheduled for New Year's Eve, December 31, 2018. Two were scheduled for July 1, 2019. The last scheduled minimum wage increase occurred on October 1, 2019. [1]

https://ballotpedia.org/Minimum_wage_increases_in_2019
 
 
 
Texan1211
1.1.20  Texan1211  replied to  Ender @1.1.19    4 weeks ago

Only about 1.7 million earn minimum wage.

Not sure what the breakdown by state is, but I am skeptical that only 1.7 would account for the economic gains.

 
 
 
It Is ME
1.1.21  It Is ME  replied to  Texan1211 @1.1.20    4 weeks ago
Only about 1.7 million earn minimum wage.

Don't forget.....In "TDS Media Land"....the "Minority" ARE the "Majority" ! jrSmiley_98_smiley_image.gifjrSmiley_103_smiley_image.jpg

 
 
 
Ender
1.1.22  seeder  Ender  replied to  Texan1211 @1.1.20    4 weeks ago

It would certainly count for growth in low wage earnings.

 
 
 
JohnRussell
2  JohnRussell    one month ago

The major media has helped spread the opinion that the economy has "skyrocketed" under Trump, and frankly, pubic opinion has a lot to do with consumer confidence, thus spending by consumers (even though much of it is done on credit). 

Instead of criticizing the media, Trump should be thanking them. 

Almost every good thing that has happened to the working man under Trump (lower unemployment, modest wage increases) was already well underway under Obama, and undoubtedly would have continued under Hillary Clinton. 

 
 
 
Ender
2.1  seeder  Ender  replied to  JohnRussell @2    one month ago

I say trickle down is an apt name. After the top percent and corporations get a whirlwind, regular folk get what is left that might trickle down to a few.

 
 
 
Freedom Warrior
3  Freedom Warrior    one month ago

Are you better off than under the old tax system. Fuck Yeah.

The losers of course are largely in CA and NY.

One thing for sure is they are never going to reduce the deficit.  Those bastards in DC don't have the nads and that is simply because the electorate doesn't want them to turn of the spigot at the government teet.

 
 
 
Ender
3.1  seeder  Ender  replied to  Freedom Warrior @3    one month ago
Are you better off than under the old tax system.

About the same.

I do agree they will not tackle debt or deficits. Only Rand Paul seems to speak on it.

 
 
 
Freedom Warrior
3.1.1  Freedom Warrior  replied to  Ender @3.1    one month ago

The S&P 500 is up nearly 30% YOY.  That means if someone were nearing retirement age and fully invested in the market they likely would be able to retire in 2020.  Prior to that they may have been looking at another 4 years of kissing corporate ass instead of tasting financial freedom.

 
 
 
Ender
3.1.2  seeder  Ender  replied to  Freedom Warrior @3.1.1    one month ago

Stocks have been following a ten year trend, with the exception of 2018 being flat.

We will have to wait and see what all the new changes will do for 401k's.

 
 
 
Dean Moriarty
3.1.3  Dean Moriarty  replied to  Ender @3.1.2    one month ago

That’s baloney pull up the five year charts of the major indexes and look at 2015 and 2016. 

In 2015 both the Dow and S&P 500 closed down for the year with only the Nasdaq having a gain. https://www.cnbc.com/2015/12/31/us-markets.html

 
 
 
Ender
3.1.4  seeder  Ender  replied to  Dean Moriarty @3.1.3    one month ago

512

 
 
 
pat wilson
3.1.5  pat wilson  replied to  Ender @3.1.4    one month ago

He still can't match Obama's numbers

https://fortune.com/2019/11/01/trump-obama-markets-comparison-s-and-p-500-dow-nasdaq-economy/

The S&P 500 Is at an All Time High—But Markets Still Performed Far Better Under Obama Than Trump

 
 
 
Dean Moriarty
3.1.6  Dean Moriarty  replied to  Ender @3.1.4    one month ago

Just like I said that is the Dow chart and shows a decline for 2015 and the Trump rally beginning the day after he was elected in November of 2016. 
https://money.cnn.com/2017/11/08/investing/trump-rally-anniversary-stocks/index.html

 
 
 
Ender
3.1.7  seeder  Ender  replied to  Dean Moriarty @3.1.6    one month ago

There was also a decline in 2018. Both rebounded.

 
 
 
Ronin2
3.1.8  Ronin2  replied to  pat wilson @3.1.5    one month ago
 
 
 
Freedom Warrior
3.1.9  Freedom Warrior  replied to  Ender @3.1.2    one month ago

Well despite the catastrophic predictions of left-wing jerk off economists since Trump took office people’s lives have improved dramatically if they were fully invested in the stock market but most notably in 2019 the 30% I just referred to above does not represent a 10 year trend.

 
 
 
Ender
3.1.10  seeder  Ender  replied to  Freedom Warrior @3.1.9    one month ago

The Dow was 21.98%.

Funny how none of you are actually commenting on what the article is about.

Have to say...look at stocks...

Fact is, the tax cuts were a dud.

 
 
 
Freedom Warrior
3.1.11  Freedom Warrior  replied to  Ender @3.1.10    one month ago

That's entirely false.  That's the latest meme of the Dems that has been debunked.   Good luck with selling snow to an Eskimo.

 
 
 
Ender
3.1.12  seeder  Ender  replied to  Freedom Warrior @3.1.11    one month ago

How is it false?

 
 
 
Freedom Warrior
3.1.13  Freedom Warrior  replied to  Ender @3.1.12    one month ago

I already told you.  And you aren't fooling me or anybody else who is well versed in economic metrics.

 
 
 
Ender
3.1.14  seeder  Ender  replied to  Freedom Warrior @3.1.13    one month ago

So you say and offer zero proof. I will help you a little. This is up from what I said. Still not 30%

2019 26,335.48 23,346.24 28,551.53 22,686.22 28,551.53

22.39%

https://www.macrotrends.net/1358/dow-jones-industrial-average-last-10-years

 
 
 
dennis smith
3.1.15  dennis smith  replied to  Ender @3.1.14    4 weeks ago

The DOW and S&P hit all time highs in Dec 2019. You are on the wrong side of the facts.

 
 
 
Ender
3.1.16  seeder  Ender  replied to  dennis smith @3.1.15    4 weeks ago

Never said it didn't. I am disputing a 30% gain for the year.

 
 
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