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Two Years In, Tax Cuts Prove to Be Trick, Not Treat

By Cory Allen Heidelberger on 2019-12-22

Oops—wrong holiday!

More coal in our stockings: those “rocket fuel” tax cuts Mike Rounds gave us for Christmas two years ago still don’t work the way he promised. In addition to throttling charitable giving and increasing the deficit, the economy isn’t growing any faster than it was before the tax cuts, when America was governed by a decent man:

Source: Americans for Tax Fairness: Bureau of Economic Analysis (BEA), “National Accounts (NIPA): Section 1, table 1.1.1, line 1, gross domestic product, percent change from preceding period.” 2019 is an average of the three quarterly rates available thus far this year. https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=2#reqid=19&step=2&isuri=1&1921=survey
Source: Americans for Tax Fairness: Bureau of Economic Analysis (BEA), “National Accounts (NIPA): Section 1, table 1.1.1, line 1, gross domestic product, percent change from preceding period.” 2019 is an average of the three quarterly rates available thus far this year.

Since Americans for Tax Fairness made that chart in November, we’ve gotten figures from the Commerce Department showing our third-quarter GDP growth was only 2.1%:

The Commerce Department said Friday that the gross domestic product — the economy’s total output of goods and services — expanded at a moderate annual rate of 2.1% in the July-September quarter. A separate report showed that consumer spending grew by a solid 0.4% rate in November, the strongest gain since July, and that incomes rebounded after a weak reading in October [Martin Crutsinger, “US Economic Growth and Consumer Spending Show Resilience,” AP, 2019.12.20].

GDP growth would have been stronger if the Idiot-in-Chief didn’t keep sabotaging the economy:

The brisk pace of spending in November is a reassuring sign that consumers, who account for about 70% of economic activity, are helping the economy offset drags ranging from President Donald Trump’s trade wars to a global economic slump [Crutsinger, 2019.12.20].

The economy would also be growing faster if Trump and Rounds hadn’t shunted most of the tax cuts to their rich pals and had left more money in the pockets of lower- and middle-class consumers, whose power to stimulate the economy through their greater spending rates is well-attested:

In fact, more than 60% of the tax savings went to people in the top 20% of the income ladder, according to the nonpartisan Tax Policy Center. The measure also slashed the corporate tax rate by 40%.

…”For millions of middle-class Americans, it is not a very happy anniversary,” said Sen. Ron Wyden, D-Ore [Scott Horsley, “After 2 Years, Trump Tax Cuts Have Failed to Deliver on GOP’s Promises,” NPR: All Things Considered, 2019.12.20].

Ho ho ho.

Published in national

13 Comments

  1. John Kennedy Claussen, Sr., 2019-12-22 14:38

    The only thing that supply-side economics ever has to offer is an eventual stock market crash, because often the supply-side economic mentality is attached to a de-regulatory mentality as well, and then, its the later mentality, which then brings the fall of the economy.

    There are two types of modern Republican presidencies: The Coolidge/Hoover model, or else, the Eisenhower model. The C/H model has always resulted in a stock market crash with supply-side economics having been a part of its reality, while the Eisenhower model tends to be merely a moderating, a slowing, or halting of recent Democratic politics and policies.

    If Trump is re-elected, history says that we will see a severe collapse of the markets in his second term, and a collapse which will take an other whack at what still remains of the American middle class; and also keep in mind, with interest rates having not gone up that much in the last ten years since the Great Recession, that the Federal Reserve will have less to work with in attempting to stimulate a future economic slump, which in turn, will require the Fed to rely even more upon quantitative easing, in order, to stimulate a future American economy that is struggling; which then begs the question as to what such a greater QE could do to the stability of the dollar in the future and America’s future position as the holder of the worlds only true current reserve currency?

  2. grudznick 2019-12-22 17:44

    I didn’t even read the text, which I’m sure I disagree with and have the proof to win yet another of the debates against Mr. H, but the picture of that fat slug thing reminded me of the old “Jabba the Gant” days, which made this old grudznick smile at Christmas.

  4. grudznick 2019-12-22 18:54

    Ms. leslie, I didn’t even read your blogging. I just really like the phrase “Jabba the Gant” and the picture Mr. H blogged up there for us to view. Heh. Jabba the Gant.

  6. grudznick 2019-12-22 19:05

    I can’t click blue links, Ms. leslie, without some sort of “take” from somebody I trust. Lar really screwed that all sideways and upside down with his old blue porn links.

    Lar wrecked blue links, unless you give some take. What’s your take?

  7. Debbo 2019-12-22 20:21

    History has proven only one thing trickles down GOP legs onto the rest of us.

  8. Cory Allen Heidelberger Post author | 2019-12-22 21:04

    Hey, JKC! How come a smart guy like Hoover only took one turn to drop us into a recession well an idiot like Trump would get a second term before his economy explodes? Is it because Hoover followed Coolidge and Harding who did all the damage?

  9. John Kennedy Claussen, Sr., 2019-12-23 00:21

    Hoover inherited Coolidge’s “Roaring Twenties,” but he didn’t know what to do with its collapse, and/or was unwilling to listen to Harvardites like Galbraith to solve it…. So Trump gets the benefit of a “second term reality” to show off his true wares, if re-elected. Coolidge’s “The business of America is business” didn’t bear ill fruit until early into Hoover’s presidency and Reagan’s happen just short of seven years in office, while Bush43’s happen in his final year. If the Democrats recapture the White House in 2020, it will be like Hoover inheriting a potential volcanic reaction, but hopefully it will turn out to be an Obama experience of defusing the many economic problems that lay ahead thanks to the orange mess.

  10. leslie 2019-12-24 21:04

    “A 2015 exposé by journalists at InsideClimate News, the LA Times, and Columbia University revealed that Exxon Mobil scientists performed experiments and conducted models in the 1970s that showed greenhouse emissions would trigger climate change.”

    Trustworthy enough for u grdz? idiot!

  12. Debbo 2019-12-25 14:55

    Good link Mike.

    I imagine the #2 thing this deministration will be remembered for is lying. Lying flat out, lying by distortion, lying by omission, lying by mathematical idiocy, lying by stupidity, lying by ignorance, lying by insanity, lying by cruelty, etc.

    #1, of course, will be impeachment. 😁

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