Oh Dear! Did the Trump Tax Cuts Really "Pay For Themselves"?

wtf's best bud is Piketty, then that means hes from Pluto. thats really way out there...

wtf's best bud is Piketty, then that means hes from Pluto. thats really way out there... Originally Posted by dilbert firestorm

WTF's on a roll. He keeps quoting economists who are so far left he doesn't agree with them. But he doesn't realize that.

WTF's on a roll. He keeps quoting economists who are so far left he doesn't agree with them. But he doesn't realize that. Originally Posted by Tiny

You keep agreeing with Bernie Sanders and do not realize it! p

WTF's on a roll. He keeps quoting economists who are so far left he doesn't agree with them. But he doesn't realize that. Originally Posted by Tiny

You keep agreeing with Bernie Sanders and do not realize it! p Originally Posted by WTF

Whoa, Nellie! What in the wide, wide world o' sports is a-goin' on here?

Tiny agrees with Bernie? Well, maybe on something! Texas Contrarian probably agrees with Bernie on something, too. Give him a little time and maybe he'll find it.

Hell, WTF agrees with Texas Contrarian at least once or twice a year. And Texas Contrarian even agrees with The Great Krugtron now and then!

And here's where, back in the 1980s, our progressive friends might have lauded Ronnie Reagan! After all, they like Obama, and when he was seeking to raise taxes on the wealthy, guess who Barack held up as an exemplar of fairness. See this very short (90-second) clip:



Holy smokes!

If you wanted to raise taxes on the very wealthy back in the '80s, Ronnie was your man. Not that wimpy Jimmy!

And Ronnie came through, too, when he signed the 1986 tax act, sponsored and passed overwhelmingly with only three nay votes in the Senate. "Yea" votes included Al Gore, John Kerry, and Teddy Kennedy. And ... oh yeah, a certain Senator from Delaware named Joe.

If left-wing hacks like Dean Baker actually bothered to learn something about this issue, instead of just parroting the echo chambers of progressive think tanks and a number of universities around the land, maybe you'd see a little more in the way of reasoned debate.

The cognitive dissonance is really in a league of its own!

https://youtu.be/eq3F0c2y5oI

Oh dear!

There's a new study out showing that trumpy's 2017 TCJA did wonderful things for the US economy - and without depriving the feds of revenue!

And guess who authored it? Economists from Harvard, Princeton, U. of Chicago and the US Treasury! A collaborative effort published by the National Bureau of Economic Research (NBER):

https://conference.nber.org/conf_papers/f191672.pdf

Even Obama economists like Jason Furman endorsed its conclusions!

WSJ columnist James Freeman recently summarized it this way:


The Trump Corporate Tax Reform Worked
Incentives matter—and business investment soared.

By James Freeman

Nov. 1, 2023 1:19 pm ET

Donald Trump has a lot of faults, but even his partisan opponents and the academic establishment have to acknowledge that his signature 2017 corporate tax reform really did lead to a surge in business investment.

Economists from Harvard, Princeton, the University of Chicago and the U.S. Treasury report in a new National Bureau of Economic Research paper on “the investment and firm valuation effects of the Tax Cuts and Jobs Act (TCJA) of 2017, the largest corporate tax reduction in the history of the United States.”

The authors share a number of findings:

First, the TCJA caused domestic investment of firms with the mean tax change to increase by roughly 20% relative to firms experiencing no tax change. Second, the TCJA created large incentives for some U.S. multinationals to increase foreign capital, which rose substantially following the law change. Third, domestic investment also increases in response to foreign incentives, indicating complementarity between domestic and foreign capital in production. Fourth, the general equilibrium long-run effects of the TCJA on the domestic and total capital of U.S. firms are around 6% and 9%, respectively. Finally, in our model, the dynamic labor and corporate tax revenue feedback in the first 10 years is less than 2% of baseline corporate revenue, as investment growth causes both higher labor tax revenues from wage growth and offsetting corporate revenue declines from more depreciation deductions.

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 lower corporate tax rates were offset by an expanding economy. Game, set, match.

Responding to the study, William McBride and Alex Durante of the Tax Foundation elaborate on how lower corporate tax rates still generate voluminous receipts for the Treasury, even within the 10-year windows of Beltway budgeting:

Regarding the TCJA’s impact on tax revenue, the study finds small dynamic effects within the 10-year budget window after accounting for increased economic activity. Tax revenues from labor increase due to the increased wage growth but are offset by a decline in corporate tax revenue particularly from bonus depreciation in the first few years after enactment. However, by year 10, dynamic corporate tax revenue gains begin to offset static corporate tax revenue losses while dynamic labor tax revenue reaches about 15 percent of baseline corporate tax revenue. This is sufficient to fully offset the static revenue losses from the corporate provisions by the end of the budget window.

The new study has economists buzzing on the platform formerly known as Twitter. “These are the most convincing estimates of the response of investment to corporate tax rates that I’ve ever seen,” says Harvard’s Jason Furman, former chairman of the Council of Economic Advisers during the Obama administration. He is not among the study authors but describes the findings in a series of posts on X:

Taxes actually do matter... Companies that saw larger reductions in tax rates from the TCJA also experienced larger increases in investment in the years that followed...

Note they find that they increase investment overseas and that this investment is a complement that leads them to increased investment in the United States.

Let’s hope that Mr. Trump appreciates this last part of his success and understands how groovy it is for everybody when pro-growth U.S. tax policy encourages multinationals to increase investment around the world.

Economists will continue to debate the impact of the policy provisions for individual taxpayers in the 2017 Trump reform. But when it comes to corporate taxation, there is no longer an argument that higher rates would lead to more economic growth or increased tax collections.

https://www.wsj.com/articles/the-tru...orked-7670b723

I was totally in favor of the corporate tax cuts in Trump's tax package. They were long overdue. I did think that the cut in the corporate tax rate was too much but better too much than none at all. On the other hand, I was not totally in line with the tax cuts for individuals. I think they favored the rich more than the lower middle class and below. I did not need the paltry amount of money the package gave me and would not have minded at all if people in my tax bracket got nothing and the lower income people got more.

Very few criticize Trump on his handling of the economy. He did a good job. But as the 2020 election showed, voters vote on more than the economy.

Corporate Tax rates are not what ppl are voting on. They are voting on a referendum on laws, limitations of social liberties and character.

To that, the incumbent and the leading GOP candidate are literally out of contention or will be shortly. Time to turn the page.

Corporate Tax rates are not what ppl are voting on... Originally Posted by eyecu2

Not per se. But if those tax cuts stimulate healthy economic growth and rising real incomes, people definitely notice and vote accordingly.

Not per se. But if those tax cuts stimulate healthy economic growth and rising real incomes, people definitely notice and vote accordingly. Originally Posted by lustylad

Yes, we kept hearing in 2018 from Trump supporters on this forum that "it's the economy" and Republicans lost the House. Then in 2020 we were told that "it's the economy" and Republicans lost the Senate and the presidency. Then in 2022, with inflation running rampant, Republicans lost all the contested major elections in states like Pennsylvania, Georgia, and Arizona.

The good news for Republicans is I predict they will either tie up the Senate 50-50 or take a 51-49 lead in 2024. Too early to make House predictions.

Ted Cruz like those cuts but only cause he's a lapdog. So As long as Ted Cruz gets cancelled in the next election....I'm good. He's a fucking "shit bag toad stool sandwich with arsenic sauce". If everyone hated Raymond, they really fucking abhor Rafael"Ted" Cruz.

Off topic, eye.

Start another thread if you want to tell everyone how much you hate Ted Cruz.

Just pointing out those ppl who liked the tax cuts you conservatives are crowing about. I even prefaced it in the first sentence, which was the thread topic.

Just pointing out those ppl who liked the tax cuts you conservatives are crowing about. Originally Posted by eyecu2

Not just "conservatives", eye. It's being conceded by economists of all stripes that the 2017 TCJA was effective in stimulating private investment, capital inflows and job growth without resulting in a significant net loss of federal tax revenues.

As I've said many times before (usually in reference to Paul Krugman) - I prefer my economists to be empirical rather than polemical. That means keep your fucking politics and partisan biases out of it. Does the empirical evidence suggest it was good policy or bad policy?

This is an old thread. It has 252 replies and nearly 47k views. I bumped it to note the new NBER study which strengthens the case I made when I started the thread 19 months ago. Why don't you go back and read this thread from start to finish, then look at the 85-page NBER study (link is in post #246 above), and let us know your thoughts?

Yes, we kept hearing in 2018 from Trump supporters on this forum that "it's the economy" and Republicans lost the House. Then in 2020 we were told that "it's the economy" and Republicans lost the Senate and the presidency. Then in 2022, with inflation running rampant, Republicans lost all the contested major elections in states like Pennsylvania, Georgia, and Arizona. Originally Posted by SpeedRacerXXX

Actually speedy, it was James Carville who coined the phrase "it's the economy, stupid" after managing Bill Clinton's successful 1992 Presidential campaign. What people tend to forget is that Clinton won with only 43% of the popular vote.

You suggest the Republicans were trounced in 2018, 2020 and 2022. I think the results were mixed, although they clearly fell short of GOP expectations in all three years. Candidate quality is a big problem for both parties. Herschel Walker was a flawed candidate for US Senate in Georgia, as was John Fetterman in Pennsylvania. IMO BOTH should have been rejected by voters last year. Republicans did take back the House, and you forgot to mention Brian Kemp was re-elected as Governor in Georgia.

Given all the extraneous noise affecting recent elections - the Kavanaugh hearings in 2018, the pandemic in 2020, abortion hysteria in 2022 - we can't expect pocketbook issues to be the ONLY driver of election results. And while you can't expect the average voter to link their economic good fortune to a specific tax bill (such as the TCJA), you can assume they will tend to favor the incumbent if the economy is on a solid upswing.

But for the pandemic, I believe Trump would have been re-elected in 2020. We wouldn't have experienced the unprecedented gyrations in GDP growth or the dramatic spike in unemployment that occurred in mid-2020. And we wouldn't have used the national health emergency as an excuse to relax all the election rules to allow so many feebly monitored mail-in ballots either.