Trump’s Tax Law Still Hasn’t Helped Working Families
January 10, 2020
Trump promised that his tax law would benefit the middle class, trickle down to workers, and significantly boost economic growth. None of that happened.
Middle-class families, who Trump promised would be the focus of his tax law, are instead falling further behind.
CBS News: “Thanks to the Tax Cuts and Jobs Act, top earners are also expected to get the biggest overall reduction in taxes over the five-year period studied by the CBO — their tax rate is projected to slide by 3 percentage points over the next two years, versus a dip of only 1 percentage point for the bottom 95% of earners, according to the CBO. The tax rate for households in the 96th to 99th percentiles is expected to fall by 2 percentage points.”
The “tax cut bonuses” Trump once touted proved to be a one-time gimmick.
Wall Street Journal: “Still, one widely publicized feature of the 2017 tax law hasn’t held up: The bonuses many companies announced for employees—often described as sharing the benefits of the corporate tax cut with workers —haven’t been repeated, even as company tax savings persist.”
Trump’s tax cuts still are not paying for themselves, and instead helped push the federal deficit to nearly $1 trillion a year.
Wall Street Journal: “The result: Overall tax revenues as a share of the economy have fallen. Within that smaller revenue stream, more of it is coming from individuals, rather than companies.”
New York Times: “The [Trump tax] cuts, and to a lesser degree the additional spending, have helped push the federal budget deficit to nearly $1 trillion a year.”
Trump’s tax law failed to spur business investment, which he and Republicans said would trickle down to higher wages for workers.
Wall Street Journal: “Business investment grew faster at first, but not dramatically. In fourth-quarter 2018, a broad measure of business investment rose 5.9% over the same quarter in 2017 — the growth rate the CBO said it had predicted when analyzing the tax legislation. But growth soon returned to pre-overhaul levels, and has since all but stalled and even declined from first through third quarter this year.”
Washington Post: “Boosters of the package predicted it would set off a virtuous trickle-down effect. The cuts, they said, would compel businesses to invest in their own operations. In theory, that would boost their productivity, ultimately yielding higher wages for workers…. Instead, the first step in that daisy chain largely hasn’t come to pass.”
Economic growth fell far short of Trump’s promises in the first two years under his tax law.
NPR: “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.”
New York Times: “The American economy appears to have grown by a little more than 2 percent in 2019, though the statistics are not yet fully compiled. That is likely to be the slowest rate of Mr. Trump’s presidency, and well below the growth he promised that his economic and regulatory policies would produce.”