Report: Trump Tax Law Having Negligible Effect on the Economy
The most significant accomplishment of Donald Trump’s presidency, thus far, has been the passage of his 2017 tax law. The new tax scheme has been criticized as being overly favorable to the rich while not aiding the working class.
A non-partisan group called the Congressional Research Service recently conducted a study on the effects of the measure. According to the the group’s experts, the law has not positively affected the economy in any appreciable way.
Jane Gravelle and Donald Maples, policy experts from CRS, explained, “While evidence does indicate significant repurchases of shares, either from tax cuts or repatriated revenues, relatively little was directed to paying worker bonuses, which had been announced by some firms.”
While the bill has had a positive effect on the paychecks of management, workers have seen little change in their paychecks. Many may have received one-time bonuses, but have not see an increase in their regular pay. Gravelle and Maples continue, “Worker bonuses could also be a result of a tight labor market and attributed to the tax cut as a public relations move.”
The researchers were also alarmed by the lack of wage growth. The duo says, “In the absence of the tax cuts, wages should grow with the economy and wage rates should grow as the capital stock grows. In addition, tight labor markets resulting from the approach to full employment should have put upward pressure on wage rates in any case.”
Maples and Gravelle concluded, “On the whole, the growth effects tend to show a relatively small (if any) first-year effect on the economy.
The report may point to more bad news for Trump and his administration. While the current economy is in terrific shape, experts have been warning of a possible recession to come.