Remember when then-President Trump instituted a bunch of tax cuts and job reforms? They said it would never work. But just a few years later, experts from everywhere have to admit the truth.
The results of the 2017 Tax Cuts and Jobs Act were recently released in a 51-page National Bureau of Economic Research report. And the summary is hard to ignore.
As James Freeman of the Wall Street Journal wrote, “The results of the Trump corporate tax reform were more business investment, more growth, more wages for workers – and little impact on government revenue as an expanding economy offset lower corporate tax rates. Game, set, match.”
The Tax Foundation noted that the tax cuts first reduced the corporate tax permanently from 35 percent (the highest in the world) to 21 percent (just below average).
It also allowed for immediate rather than delayed expensing for shorter-term capital investments for businesses. Rather than those being written off over five years, businesses could write them off that same year.
As the economists of the NBER report wrote, this means that went companies are allowed to reinvest and grow, they become more efficient, and their employee salaries go up. This, in turn, causes more to be paid in taxes.
So, no real revenue is lost despite the lower corporate rates.
Jason Furman, former chair of the Council of Economic Advisers for Obama and a professor at Harvard, admitted that overall, the TCJA worked just as Trump advertised it would.
Taxes actually do matter (Part I). Companies that saw larger reductions in tax rates from the TCJA also experienced larger increases in investment in the years that followed.
From a cool new paper by @gchodorowreich @omzidar Eric Zwick & Matthew Smithhttps://t.co/DHEDNVRubv pic.twitter.com/KL85iutprY
— Jason Furman (@jasonfurman) October 20, 2023
Hell, even Biden had to admit that the tax cuts worked. And they still are, even though Biden’s inflation has caused the overall effect to diminish slightly.
As Biden said in March of last year, “We have generated a GDP growth of 5.7 percent, the best economic growth” since Reagan, who made similar tax cuts prior to record economic growth in 1983 and 1984. Of course, he tried to take credit for those.
But as we all know, it was Trump who created such economic growth. Thankfully, Biden’s time destroying all that Trump did is coming to an end. And thanks to a GOP-led House of Representatives, some of his massive spending habits are being turned around.
