Friday, August 17, 2018

Trump's Tax Wisdom


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  • by Donna Lu

New York Times editorial, You Know Who the Tax Cuts Helped? Rich People:
When Republicans were pitching a massive tax cut for corporations and wealthy families last year, they promised voters many benefits: increased investment, higher wages and a tax cut that pays for itself. The tax plan, congressional leaders said, would turbocharge the American economy and provide a much-needed helping hand to working-class families.
“Most people, half the people in this country, live paycheck to paycheck, so there’s a lot of economic anxiety,” the House speaker, Paul Ryan, told The Times in November. “And I think just one of the key solutions is faster economic growth, more jobs. And I think the best thing we could do to deliver that is tax reform.”
So, more than six months since President Trump signed the tax cut into law, is it delivering on the promises Mr. Ryan and other leaders made? ...
The most notable outcome of the tax law is one that few Republicans talked about: Companies are buying back their own stock — a lot of it. Stock buybacks are expected to reach a record $1 trillion this year. After Congress reduced the top federal corporate tax rate from 35 percent to 21 percent, businesses are flush with cash. Lawmakers also let companies repatriate foreign earnings that they have been amassing at a rate of 15.5 percent for cash and 8 percent for other assets.

Wall Street Journal op-ed:  Trump's Tax Wisdom, by James Freeman:
Imagine how high the U.S. economy can soar if President Trump resolves the arguments he started with America’s trading partners. Already the conventional wisdom on the tax law he signed in December is moving in his direction. Whereas prior to the law critics suggested it would provide a modest temporary boost, there’s now an emerging consensus that the law may pull so much investment into the United States that it could impoverish governments across the globe.
Nothing says establishment consensus like the International Monetary Fund. The Journal [U.S. Corporate Tax Cuts Likely to Hit Other Countries’ Bottom Lines] on the findings of a new IMF working paper [Tax Spillovers from US Corporate Income Tax Reform] forecasting the results of the suddenly more competitive United States: