Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

The Tax Cut and Jobs Act of 2017

by August 29, 2024
August 29, 2024
The Tax Cut and Jobs Act of 2017

Jeffrey Miron

Focusing on the business tax cuts, a new paper reaches five conclusions:

First, large corporate tax cuts are expensive and increase the deficit substantially; specifically, the reform reduced corporate tax revenue by 40 percent.

Second, taxes matter for corporate investment. Firms facing larger corporate tax cuts invested more than firms facing smaller cuts. Three empirical approaches indicate that the tax cuts increased total tangible corporate investment by 8–14 percent. This response was far too small to offset the forgone tax revenue.

Third, domestic tax treatment of profits abroad can have important effects on investment at home; for example, provisions that increase foreign investment by US-based multinationals also boost their domestic operations.

Fourth, the effects of the [Tax Cut and Jobs Act] on economic growth and wages were smaller than advertised. Our analysis shows a long-run increase in wages of $750 per year (in 2017 dollars) per full-time equivalent employee. This impact was significantly below the $4,000–$9,000 range that the Council of Economic Advisers predicted before the law’s passage.

Fifth, the economic value received from forgoing tax revenue varies across different tax provisions. For example, it matters whether corporate tax reform encourages new capital creation via investment incentives rather than enriching old capital with corporate income tax cuts.

In brief, the corporate income tax changes generated substantial benefits, but several claims about these benefits (only a minimal reduction in revenue, with a large increase in wages) were significant exaggerations.

This article appeared on Substack on August 29, 2024.

0
FacebookTwitterGoogle +Pinterest
previous post
Ignore the Politicians: Trade Deficits Don’t Really Matter
next post
Harris was ‘open’ to packing Supreme Court during 2019 presidential bid

You may also like

Department of Agriculture Bureaucracy

August 14, 2023

Weak Income Tax Collections Pose Challenges for Some...

August 7, 2023

Friday Feature: Victory Christian Enhanced Learning Center

February 21, 2025

How Subsidies in the Inflation Reduction Act Undermine...

September 22, 2023

Trump’s Automotive Tariffs Will Hurt American Consumers and...

March 29, 2025

New Economic Freedom Report: Hong Kong Falls from...

September 19, 2023

A Record Quarter of a Million International Students...

March 19, 2024

Advancing School Choice While Protecting Homeschoolers

September 5, 2023

The New Deal and Recovery, Part 18: The...

July 29, 2022

Medicaid and Emergency Room Use

July 11, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump ally stands firm against ‘big, beautiful bill’ despite pressure: ‘It’ll completely backfire’

      June 8, 2025
    • Rubio condemns assassination attempt on Colombian presidential candidate Miguel Uribe

      June 8, 2025
    • Obama WH physician says Biden doc should have performed cognitive test

      June 8, 2025
    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,571)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved