Posted on 12/23/2019 4:30:54 AM PST by karpov
It’s been two years since President Trump signed the Tax Cuts and Jobs Act into law. To the delight of supply-siders, the law contained significant marginal tax rate reductions for individuals and corporations. At the time there was lively debate concerning the likely economic impact of the bill, with opponents pointing to analyses that found little effect from the rate reductions. At the White House, where we worked at the time, we produced analyses that suggested economic growth would surge. On the second anniversary of the TCJA, the numbers are in, and our projections have been vindicated.
The view that the tax cuts would jump-start the economy was based on abundant economic literature examining how tax policy affects decision-making by businesses and individuals. On the corporate side, the tax cut reduced the cost of installing new plant and machinery by about 10%, suggesting that capital spending would jump by the same amount. This would increase the amount of capital per worker and drive up productivity and wages. President Trump emphasized the last point repeatedly, arguing that family incomes would increase by about $4,000 in three to five years, with blue-collar workers benefiting disproportionately.
This predicted increase in capital has materialized, and has translated into additional economic growth. In 2017 our calculations suggested gross domestic product growth would accelerate in response to higher capital spending, with the contribution of nonresidential fixed investment to real GDP growth rising to between 0.8% and 1% in 2018. The contribution of this type of investment to economic growth from the first quarter of 2018 to the fourth quarter of 2018 was right on target, at 0.8%. This wasn’t the existing trend. Capital spending was 4.5% higher in 2018 than pre-TCJA blue-chip forecasts, and this trend continued in 2019.
(Excerpt) Read more at wsj.com ...
Has unemployment ever been lower? I don’t believe it’s ever been this low for blacks or Latinos.
And where is that dreadful national debt spike that dems swore would happen if President Trump cut taxes the way he wanted to?
Hint: it never happened.
Obama raised the national debt by grotesque numbers, not President Trump. Trump’s economic policies have worked exactly as they were meant to and brought a big flow of revenue into the treasury without pain and suffering for the American workers.
Most people didn’t think it was possible, but somehow the Democrats and the media CONVINCED roughly 90% of the country that they didn’t get a tax cut (either they didn’t ‘see’ the tax cut or they think their taxes went up...regardless if that were true), whereas something like 90% of the country actually DID get a tax cut. (I certainly got a tax cut, but then I do my own taxes)
I really didn’t think that power was still possible, considering the Internet, talk radio, and Trump talking directly to Americans...but I was wrong.
In hindsight, I think part of the way people were tricked was when they were told they were losing their big deduction, state and local taxes - and therefore that means their taxes had to go up (which was true for a small percentage of them, but not the vast majority - since rates went down and brackets changed).
Well it’s good that a trillion dollar a year deficit didn’t spike :)
Trump has done a MASTERFUL job since being in office.
But it’s HARD to take things away from the people once it’s been given to them.
It’s hard to run a campaign promising to take thing away also.
Once he wins next year, he can take stronger action on a few things that are better to attack once you win your last term.
The increasing GDP under Trump of course affect the debt to GDP ratio, and he has very successfully helped that number.
I just read Steven Chapman’s latest in the Chicago Tribune. He claims his tax cut is a mathematical fraud.
President Trump has faith in America and the American people. That’s the attitude that made Reagan great.
Imagine that, the DS economists were wrong. Trump has been 100% right, the DS bureaucrats 100% wrong on every issue. No wonder they’re working so hard to depose him.
Budget deficits are large and rising, which has increased the national debt, as can be seen at Wikipedia and other sources.
Hint: it never happened.
You are aware that the deficit is due to hit $1 trillion this year and even higher next year, aren't you?
Look up which people were hurt by the tax reform - and you’ll see people with large families there. The elimination of the personal exemptions was crushing; it removed thousands of dollars from your untaxed income.
I had no issue with the state and local tax deductions; it was a laudable move, preventing lower-tax areas from basically subsidizing high-tax ones.
“You are aware that the deficit is due to hit $1 trillion this year and even higher next year, aren’t you? “
How much of that is interest on the national debt? Also, aren’t health care costs continuing to go up, despite all the promises of Obamacare?
“The elimination of the personal exemptions was crushing; it removed thousands of dollars from your untaxed income.”
I thought there was an offsetting tax credit for kids...unless I missed something.
There is if they are below a certain age, but for dependent adults (students, and even 17 year-olds, IIRC) there is none.
In addition, most were ignorant of the terms "deductible" and "maximum out of pocket". Once they did learn about them, the net result has been a lot of people deciding to forgo medical care when they actually need it.
I have a solution for that: flat tax for all at 15%. No credits. No deductions. Worked for me when in army making less than 2k in 69. Child credits, earned income credits, education credits, energy credits on and on. Be done with them all.
I understand that position.
In the past, the tax law was designed to encourage certain behavior such as buying a home (to provide stability) and having children (to maintain the culture and country); this tax “reform” undoes both - and it is deliberate. Note which segment is left in: the Earned Income Credit, to keep low-wage workers laboring, with added “pay” from the government (they can receive a larger refund than they initially paid in taxes).
About $480 billion per year. Adding to it at the rate of $1 trillion a year will increase that amount by billions more.
Also, aren’t health care costs continuing to go up, despite all the promises of Obamacare?
Yes, and to date there is no cheaper replacement for Obamacare regardless of all the promises. And healthcare costs for Medicare and Medicaid increase faster than the Obamacare costs do.
I checked to prove you wrong...you’re right (LOL). If your kid turns 17 in a calendar year, then you’re out of luck...no exceptions.
However, they are a small number of people, as this article shows (and proving my initial point)...which still blows my mind.
That is why the Founding Fathers limited voting to taxpayers; back in the day (before income and sales taxes), that was landowners. They understood there was no point in letting people with no “skin in the game” decide how contributions were spent; if it went south, those people could pick up and leave, while the actual taxpayers had their futures tied to that particular land.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.