Don’t expect the Trump tax cuts to deliver as much job and wage growth as Republicans promised:
The new corporate tax cuts are unlikely to stimulate the level of job creation and wage growth that the Trump administration has promised, a trio of prominent economists has concluded, because high tax rates were not pushing much investment out of the United States in the first place.
Instead, the researchers conclude, multinational corporations based in the United States and other advanced economies have sheltered nearly 40 percent of their profits in tax havens like Bermuda, depriving their domestic governments of tax revenues and enriching wealthy shareholders. That number suggests a jarringly large amount of what appears, to policymakers, to be investment pushed abroad by high tax rates is instead an accounting trick — so-called paper profits — which tax cuts will not reverse.
“This idea that if you cut taxes, you’ll attract a lot of physical capital, a lot of investment to the United States, I don’t think is supported by the evidence,” said Gabriel Zucman, an economist at the University of California, Berkeley, and one of the paper’s authors. “Paper profits — that doesn’t boost wages for workers. What boosts wages is actual factories” [Jim Tankersley, “Tax Havens Blunt Impact of Corporate Tax Cut, Economists Say,” New York Times, 2018.06.10].
Automation and demographics mean fewer jobs:
Dallas-based telecom giant AT&T has about 250,000 full-time employees in the U.S. — with about 20 percent of those at call centers — but that number will fall in the years ahead, chief financial officer John Stephens said. Some jobs will disappear and others will require new skills, such as data science and software proficiency instead of ability to lay cables. That’s why the company has a massive reskilling program that encourages the legacy telecom’s employees to take college classes and get “nanodegrees.”
“When you go from cable connecting telephone poles to spectrum in the sky, you have different jobs,” Stephens said. At the bottling plant of Coca-Cola Beverages Florida that employs about 5,000 people, CEO Troy Taylor said the company is investing more than a million dollars to reengineer its 15 manufacturing lines to make them more efficient. The result, he said, will be a smaller workforce that helps analyze data, such as tracking beverage types that sell well in certain grocery stores and geographic regions and using that to inform production and distribution.
With a low birth rate and aging Baby Boomers, companies see technology as a way to drive down costs and drive up profitability. For example, with more efficient bottling lines, they can drive down costs and drive up profits, Taylor said [Melissa Repko and Jill Cowan, “Technology Is Disrupting the Way We Work, But It’s Not All Doom and Gloom,” Dallas News, 2018.05.25].
One place where Trump’s tax cuts for the rich could lead to more jobs is the Internal Revenue Service:
The IRS worked with the Department of the Treasury and estimated that implementation of the Act would cost approximately $397 million. This includes hiring an estimated 1,734 full-time equivalent positions to implement tax reform over the next two calendar years [Treasury Inspector General for Tax Administration, “Tax Cuts and Jobs Act: Assessment of Implementation Planning Efforts,” Ref. No. 2018-44-027, 2018.04.11].
But so far, there is no evidence that the Trump tax cuts are bending any economic curves, certainly not in favor of the average worker… which could explain why tax “reform” isn’t delivering the political boost Republicans thought they’d get, either:
PPP’s newest national poll finds that six months after the passage of tax reform, it’s still not really catching on with voters. Only 31% support it to 38% who are opposed, with 30% not sure one way or the other.
The core problem for Republicans with tax reform is that voters continue to be skeptical it’s actually going to help them on a personal level. Just 30% say they think it will help their family’s finances, to 33% who think it will hurt, and 25% who don’t think it will have an impact either way. 51% think it will mostly benefit the rich to 30% for the middle class, and just 7% for the poor.
Tax reform is a piece of an overall issue for the GOP which is that most people still don’t feel their personal economic situation has improved under the Trump administration. 35% say they’re better off than they were a year ago but 26% say they’re worse off, and 37% say they’re in about the same place. Having investments in the stock market continues to be a big dividing line for whether people actually think they’re doing better or not- among those who do 43% say they’re better off and just 16% worse off. But among those who don’t only 27% say they’re better off to 35% who say they’re worse off [“Tax Reform Still Not Helping GOP; Dems Lead House Ballot by 6,” Public Policy Polling, 2018.06.13].
Hey, Tim Bjorkman! Keep riding the tax-reform horse!
Drumpf is claiming taxcuts for the koch bros is responsible for 102 utilities cutting rates to customers when those cuts were already mandated by regulations.
Those off-shore/repatriated korporate profits should be taxed at the old 35% korporate rate with another 35% penalty for cheating the government of badly needed revenues.
Investment is driven by profitability, not by tax rates. When the corporations are buying back stock with the tax break, then the investment opportunities are slim in their opinion. They can raise profits long term with investing to make the corporation larger. Buying back stock does not improve profitability at all. Since stocks are over valued, buying back stock might reduce the future correction of the stock market coming down, but it does not increase profits or wealth in total.
Trump might know the real estate industry, but that does not make him good at business. When trump wants to help the steel industry because the steel workers voted for him, he puts tariffs on steel. In the long run, this does not help steel industry. Because when manufacturers are steel’s largest customer, they do sell to construction as well, then those manufacturers who already have a tendency to go overseas for cheap labor now also have an incentive to go overseas for cheaper steel. Trump just put the steel industries customers(manufacturers) as a greater disadvantage by also raising their materials costs. This will reduce growth in manufacturing which will reduce the use of domestic steel. This will hurt the steel workers, but since trump does not look past the end of his nose, he did not see this. Trump just looks at what is best for trump and his buddies. He does not have the long range view to see that he is hurting the steel industry by hurting their customers. If he saw himself as everyone’s president, he might see this.
Drumpf doesn’t need to see things the way everyone else does. He already knows everything. Just ask him.
trump is a one page guy. His treasury dept mal-described the tax cut for the rich in one page with unproven assumptions. His “summit” of two silly autocrats delivered a one page signing with only assumptions.
Former CIA chief Brennan’s op-ed in the Post delivered his harshest invective yet against the president. “Mr. Trump, however, has shown highly abnormal behavior by lying routinely to the American people without compunction, intentionally fueling divisions in our country and actively working to degrade the imperfect but critical institutions that serve us,” Brennan wrote after expressing his respect for the four presidents under which he served.
“Mr. Trump charts his every move according to a calculus of how it will personally help or hurt him,” he added. “His strategy is to undercut real, potential and perceived opponents; his focus is to win at all costs, irrespective of truth, ethics, decency and – many would argue – the law
Brennan explained how in three decades of working for the CIA he was able to study the ways in which corrupt dictators and authoritarian leaders preyed on their people in order to enrich themselves. “It never dawned on me that we could face such a development in the United States,” wrote Brennan.
Trump said his tax cut for the wealthy would not help him. So….
Trump is not responsible for a foreign official’s “unilateral attempt to sow favor” by staying at one of his properties, his lawyer argued in a federal judge’s emoluments case.
Judge Messitte questioned how that was different from bribery.
“Another clause in the Constitution makes bribery a basis for impeachment,” Messitte said. “Are you saying that Congress could consent to bribery?”
Counsel responded by suggesting that for the act to be bribery, the president must have “some corrupt intent.”
“As long as the president takes the money without a corrupt intent, then it’s OK?” Judge Messitte asked.
The Gift Shop now has a competitor. True to his cheesy form, Trump now has HIS OWN gift shop, selling all things Trump, from autographed portraits to replica “signing pens” that he’s used for his nonstop effort to erase the Obama presidency. Even MORE cheesy? He lists the address of the shop as 1600 Pennsylvania Ave. So, to be clear – Donald Trump is running a private enterprise OUT OF OUR WHITE HOUSE to cash in on this elected office. Don’t believe it? Here’s a screen shot of the bottom of his merchandising email for his flash sale of his replica “signing pen”.
And the emoluments clause wept while unconcerned wingnuts burnt effigies of Obama in the halls of congress.