CSNbbs

Still early, but doesn't appear to be going quite as promised.

Quote:A new Congressional Research Service report finds that the 2017 Tax Cuts and Jobs Act had little measurable effect on the overall US economy in 2018. And, no, the tax cuts didn’t come remotely close to paying for themselves by turbocharging the economy as President Trump repeatedly promised. This was a surprise to few, since most independent analysts predicted more than a year ago that the law would have little economic impact.

...

Some productivity-driven wage growth may yet occur over the long term, but it certainly didn’t happen in Year One. CRS concluded the after adjusting for inflation, wages grew more slowly than overall economic output, and at a pace relatively consistent with wage growth prior to passage of the TCJA. That was especially disappointing considering that many predicted tight labor markets would result in accelerated wage growth, even without the TCJA.

...

Thanks to effective White House messaging, news organizations paid great attention to anecdotal stories of firms giving workers bonuses in late 2017, just as the TCJA was becoming law. But as Gravelle and Marples note, reported bonuses were equivalent to about $28 per US worker. And many were announced so firms could deduct the cost at their higher 2017 tax rate of 35 percent instead of the 2018 rate of 21 percent.

...

The authors estimate the one strong effect of the TCJA was its deep cut in effective corporate tax rates, from 17.2 percent in 2017 to 8.8 percent in 2018.

And, they found, multinational corporations repatriated $664 billion in foreign earnings in 2018—more than the previous three years combined—after the TCJA cut taxes on repatriated overseas earnings.

If effective corporate rates were cut in half, and firms had new access to $664 billion in overseas income, yet they didn’t spend that extra cash on wages or investment, where did it go?

CRS confirms what was well-reported at the time: Much of it went to $1 trillion in stock buybacks.

EDIT: Apologies, I forgot to include a link to the story from which I lifted the above quotes.
https://www.taxpolicycenter.org/taxvox/n...7-tax-cuts

And for bearcat, that articles does mention the tariffs and trade issue.

Quote:n fairness, the tax cuts didn’t occur in a vacuum. Some of their benefits may have been offset by President Trump’s own highly restrictive trade policy, or magnified by new deficit spending approved by Congress in 2018. But overall, as TPC predicted in December, 2017, short-term macroeconomic effects were extremely modest. This is consistent with the findings of TaxVox’s quarterly updates on the post-TCJA economy.

In a long list of unfortunate events. This tax cut boondoggle will be the most unfortunate part of his presidency.

(05-30-2019 01:54 PM)Machiavelli Wrote: [ -> ]In a long list of unfortunate events. This tax cut boondoggle will be the most unfortunate part of his presidency.

What was unfortunate about the tax cut? Lots of people I know are getting more money per paycheck now. Why is that a bad thing?

(05-30-2019 01:55 PM)VA49er Wrote: [ -> ]

(05-30-2019 01:54 PM)Machiavelli Wrote: [ -> ]In a long list of unfortunate events. This tax cut boondoggle will be the most unfortunate part of his presidency.

What was unfortunate about the tax cut? Lots of people I know are getting more money per paycheck now. Why is that a bad thing?

Because



And the American taxpayer keeping their hard earned money is against everything that the thieving left is all about.

(05-30-2019 01:54 PM)Machiavelli Wrote: [ -> ]In a long list of unfortunate events. This tax cut boondoggle will be the most unfortunate part of his presidency.

You promise?

Democrats. The party that can't get enough of what you earn.

BWAHAHHAHAHAHAHAHAHAHAHA


yea.........riiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiight...

Disclaimer: I think the tax cut was a risky move, and I'm not sold on it.

But I don't trust any "study" or "analysis" coming from the CBO or any think tank. The level of economic analysis required to analyze a complicated tax cut is simply too advanced for the people they have working there.

For example: how do they separate the effects of the tax cuts from the effects of Trump's trade wars? These amateurs don't even bring up the possibility of that having an influence, when in fact that's been the dominant driver of the economy for the last 6 months.


I'm a financial researcher at a mid-tier research university. In my opinion, the only government people qualified to do this sort of analysis work for the Fed, and there's also a few specialists at the SEC. Everyone else in government (including nearly all think tanks) is using pure guesswork. That's dangerous when people believe you.

(05-30-2019 02:19 PM)Captain Bearcat Wrote: [ -> ]Disclaimer: I think the tax cut was a risky move, and I'm not sold on it.

But I don't trust any "study" or "analysis" coming from the CBO or any think tank. The level of economic analysis required to analyze a complicated tax cut is simply too advanced for the people they have working there.

For example: how do they separate the effects of the tax cuts from the effects of Trump's trade wars? These amateurs don't even bring up the possibility of that having an influence, when in fact that's been the dominant driver of the economy for the last 6 months.


I'm a financial researcher at a mid-tier research university. In my opinion, the only government people qualified to do this sort of analysis work for the Fed, and there's also a few specialists at the SEC. Everyone else in government (including nearly all think tanks) is using pure guesswork. That's dangerous when people believe you.

And they've missed on everything else they have measured. Obamacare for instance. They missed horribly.

And they don't seem to notice that economic activity is up and better than it has been since before Obama. And they acknowledge the increase in economic activity has lead to wage growth.

We will rue that these passed. The tax cuts were just a give away to the 1 percent.

(05-30-2019 02:30 PM)Machiavelli Wrote: [ -> ]We will rue that these passed. The tax cuts were just a give away to the 1 percent.

Ask Bette Midler how she's doing under the new tax cuts.

(05-30-2019 02:30 PM)Machiavelli Wrote: [ -> ]We will rue that these passed. The tax cuts were just a give away to the 1 percent.

What it will do to the deficit remains to be seen.

But it has been the best thing in wages and jobs for the bottom 50% since at least the Reagan years. For Blacks and Hispanics, perhaps the best situation ever.

IMO the depreciation writeoffs were excess, but there is no doubt it is stimulative to be able to write off immediately assets that will last you 5 to 15 years.

Quoting from the CRS report:

"In 2018, gross domestic product (GDP) grew at 2.9%, about the Congressional Budget Office’s (CBO’s) projected rate published in 2017 before the tax cut."

I don't know what CBO projected rate they are referring to, but from CBO in January 2017, at https://www.cbo.gov/system/files/2019-04...umn_1.pdf, we have this:

"CBO estimates that, in real terms, GDP will expand at an average annual pace of 2.1 percent from the fourth quarter of 2016 to the fourth quarter of 2018, after having risen at an annual rate of 1.8 percent last year"

I think there is a fairly big difference between GDP growth on 2.9% versus 2.1%. Can someone explain?

Also, the tax cut, at least the corporate tax cut, was expected to have much greater impact in the longer term, as it would shape future investment decisions that would take several years to take effect.

(05-30-2019 02:37 PM)Owl 69/70/75 Wrote: [ -> ]Quoting from the CRS report:

"In 2018, gross domestic product (GDP) grew at 2.9%, about the Congressional Budget Office’s (CBO’s) projected rate published in 2017 before the tax cut."

I don't know what CBO projected rate they are referring to, but from CBO in January 2017, at https://www.cbo.gov/system/files/2019-04...umn_1.pdf, we have this:

"CBO estimates that, in real terms, GDP will expand at an average annual pace of 2.1 percent from the fourth quarter of 2016 to the fourth quarter of 2018, after having risen at an annual rate of 1.8 percent last year"

I think there is a fairly big difference between GDP growth on 2.9% versus 2.1%. Can someone explain?

Also, the tax cut, at least the corporate tax cut, was expected to have much greater impact in the longer term, as it would shape future investment decisions that would take several years to take effect.

Also, their data on wage growth does not come close to matching whats going on at the present. Which I would expect, since they are reporting on a previous year. But clearly wage growth is occurring much more siginifcantly than what they show, and low income wage growth is much higher than they are reporting.

(05-30-2019 02:30 PM)Machiavelli Wrote: [ -> ]We will rue that these passed. The tax cuts were just a give away to the 1 percent.

lol, still believing what the MSM tells you I see........

(05-30-2019 01:55 PM)VA49er Wrote: [ -> ]

(05-30-2019 01:54 PM)Machiavelli Wrote: [ -> ]In a long list of unfortunate events. This tax cut boondoggle will be the most unfortunate part of his presidency.

What was unfortunate about the tax cut? Lots of people I know are getting more money per paycheck now. Why is that a bad thing?

It's not...unless you were one complaining about debt and deficits when the last guy was in office.

(05-30-2019 01:55 PM)VA49er Wrote: [ -> ]

(05-30-2019 01:54 PM)Machiavelli Wrote: [ -> ]In a long list of unfortunate events. This tax cut boondoggle will be the most unfortunate part of his presidency.

What was unfortunate about the tax cut? Lots of people I know are getting more money per paycheck now. Why is that a bad thing?

Did you read RWT’s post? A Trillion went into stock buybacks. Making the 1 percent richer. Did barely NOTHING for the average American.

(05-30-2019 02:19 PM)Captain Bearcat Wrote: [ -> ]Disclaimer: I think the tax cut was a risky move, and I'm not sold on it.

But I don't trust any "study" or "analysis" coming from the CBO or any think tank. The level of economic analysis required to analyze a complicated tax cut is simply too advanced for the people they have working there.

For example: how do they separate the effects of the tax cuts from the effects of Trump's trade wars? These amateurs don't even bring up the possibility of that having an influence, when in fact that's been the dominant driver of the economy for the last 6 months.


I'm a financial researcher at a mid-tier research university. In my opinion, the only government people qualified to do this sort of analysis work for the Fed, and there's also a few specialists at the SEC. Everyone else in government (including nearly all think tanks) is using pure guesswork. That's dangerous when people believe you.

I edited my OP as I forgot to include the link to the story I lifted the quotes from. And that story does address the trade issue:

Quote:In fairness, the tax cuts didn’t occur in a vacuum. Some of their benefits may have been offset by President Trump’s own highly restrictive trade policy, or magnified by new deficit spending approved by Congress in 2018. But overall, as TPC predicted in December, 2017, short-term macroeconomic effects were extremely modest. This is consistent with the findings of TaxVox’s quarterly updates on the post-TCJA economy.

(05-30-2019 03:07 PM)Machiavelli Wrote: [ -> ]

(05-30-2019 01:55 PM)VA49er Wrote: [ -> ]

(05-30-2019 01:54 PM)Machiavelli Wrote: [ -> ]In a long list of unfortunate events. This tax cut boondoggle will be the most unfortunate part of his presidency.

What was unfortunate about the tax cut? Lots of people I know are getting more money per paycheck now. Why is that a bad thing?

Did you read RWT’s post? A Trillion went into stock buybacks. Making the 1 percent richer. Did barely NOTHING for the average American.

Do YOU not have a retirement plan?

(05-30-2019 02:29 PM)bullet Wrote: [ -> ]

(05-30-2019 02:19 PM)Captain Bearcat Wrote: [ -> ]Disclaimer: I think the tax cut was a risky move, and I'm not sold on it.

But I don't trust any "study" or "analysis" coming from the CBO or any think tank. The level of economic analysis required to analyze a complicated tax cut is simply too advanced for the people they have working there.

For example: how do they separate the effects of the tax cuts from the effects of Trump's trade wars? These amateurs don't even bring up the possibility of that having an influence, when in fact that's been the dominant driver of the economy for the last 6 months.


I'm a financial researcher at a mid-tier research university. In my opinion, the only government people qualified to do this sort of analysis work for the Fed, and there's also a few specialists at the SEC. Everyone else in government (including nearly all think tanks) is using pure guesswork. That's dangerous when people believe you.

And they've missed on everything else they have measured. Obamacare for instance. They missed horribly.

And they don't seem to notice that economic activity is up and better than it has been since before Obama. And they acknowledge the increase in economic activity has lead to wage growth.

Question, the study was done by the Congressional Research Service. Is that affiliated at all with the Congressional Budget Office? Additionally, they're analyzing things that have happened, not forecasting what's to come.