1; The Economy Will Be Supercharged
Since the investment boom never materialized, it's hardly a shock to lean that GDP growth didn't boom either. The growth rate increased modesty for two quarters and then dropped steadily. In the last quarter unaffected by by the coronavirus crisis, it was hardly above 2 percent. Not only didn't the tax cut usher in the growth that Republicans predicted, but growth rates started dropping soon after. Although the growth rate increased above 3% for two quarters, it dropped to just above 2% in 2019.
Although new orders for capital goods had spiked to slightly over 10% before the tax cut was passed, the new orders had steadily dropped to slightly above 2% late in 2019.
Business investment increased to a high of nearly 6% shortly after the tax cut was passed; however, it plunged to a minus 1% late in 2019.
2. The Tax Cut Will Pay For Itself
Corporate tax receipts plummeted from $240 billion on $140 in the first quarter after the tax cut was passed, and have stayed at that level ever since.
The annual federal deficit was almost $600 billion in 2016, and had increased to about $680 in 2017. It hit close to $1 trillion in 2019, and recent estimates have it over $1 trillion for 2020 -- pandemic spending will push it even higher.
3. Corporations Will Bring Back Profits Stashed Overseas
President Trump promised that a temporary "tax holiday" would produce a flood of repatriated earnings amounting to $4-$5 trillion -- nearly twice the amount that corporations were actually storing overseas. Repatriations to date (middle of 2020) have amounted to only $840 billion above past projections, and the total amount of repatriations in the last quarter of 2019 was only $60 billion higher than it was before the tax cut was passed. The total will never come close to the $4-$5 trillion promised.
Share buybacks have exceeded $200 billion in three of the eight quarters of 2018 ad 2019, whereas they never reached even $150 billion in the four quarters of 2017.
Foreign direct investment had a small pop in 2018, but dropped to negative territory in late 2019.
4. Your Wages Will Skyrocket
Administration economists and Trump predicted that the average household income would increase by at least $3,000, and as high as $9,000. The average household is receiving less than $1,000 annually in tax savings.
5. Jobs, Jobs, Jobs!
Treasury Secretary Mnuchin said that the tax cut was a "jobs bill." If you look at the total share of the country with jobs -- the "employment-to-population" ratio -- nothing happened after the tax cut was passed. It had been growing since the Great Recession, and it continued growing at the same rate after the tax cut was passed, until Covis-19 hit.
6. Tax Cuts For All
President Trump had called the tax cut a middle-class cut; however, the change in after-tax income (by income level) shows that the top 1% benefited by far the most. Following are the percentage increases by income level: Working poor - 0.4%; Working class - 1.2%; Middle class - 1.6%; Upper middle - 1.9%; and Top 1% - 3.4%. In 2027, the tax rate reductions will end but the top 1% will continue to benefit from other tax breaks.
7. But Guess What? Corporate Profits Soared
Corporate profits jumped 8% after the tax cut was passed,and they've stayed at their new, higher level ever since. (Source: Mother Jones, July+August 2020, pages 29-31.)
Black Deaths Matter
Black people have experienced a disproportionate share of coronavirus deaths. The 15 states with the largest reported racial disparities include several that have rushed to reopen. The first percentage for each state will be Black percentage of population and the second will be the Black percentage of Covid-19 fatalities.
Michigan - 14% and 43%
Missouri - 12% and 39%
Kansas - 6% and 33%
Louisiana - 33% and 58%
Wisconsin - 7% and 31%
South Carolina - 27% and 48%
Alabama - 27% and 46%
Illinois - 15% and 34%
Arkansas - 16% and 35%
Georgia - 32% and 50%
Mississippi - 38% and 55%
Tennessee - 17% and 32%
North Carolina - 22% and 35%
Maryland - 31% and 43%
Kentucky - 8% and 18%
ADDENDUMS:
*In May, Trump slammed Dr. Fauci: "Look, he wants to play on all sides of the equation I was surprised by his answer, actually, because you know,it is not an acceptable answer, especially when it comes to schools."
*China calls Trump, Pompeo, and Navarro the "lying trio."
*Trump calls Obama "grossly incompetent."
*Trump praised Henry Ford's "good bloodlines." In fact, Ford was a notorious anti-Semite.
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