Thread by @econjared

As a late holiday gift, I’ll summarize 3 excellent articles evaluating the tax cut after 1 yr. (The quality of tax journalism is moving inversely to tax policy.) Still, all 3 miss 1 key point IMHO. [thread]
wsj.com/articles/one-y…
nytimes.com/2018/12/27/us/…
slate.com/business/2018/…

All 3 pieces document 3 clear impacts of the cuts so far (Slate summary below):
--big revenue loss
--surge in after-tax corp profits & stock buybacks
--short-term economic stimulus

For the cuts to have more than near-term growth impacts, they’d have to boost biz investment a lot more than we’ve seen so far, though these are early days. Both WSJ and Slate show “muted” investment results, especially controlling for energy prices, which are set globally.

And WSJ shows that future investment plans, proxied by new orders, have “decelerated rapidly.”

NYT notes these tax windfalls to big corps, compared to what they would have owed under old tax regime (2018, q1-q3):
Walmart: $1.6 bn
Bank of America: $2.4 bn
AT&T: $2.2 bn
Verizon: $1.75 bn
Apple: $4.5 billion

To be clear, some of these firms added jobs and raised pay, perhaps more than they would have otherwise (Apple, Walmart). But others have cut jobs and not done much on pay/bonuses. On net, these reports find nothing like the benefits to workers claimed by the cuts’ proponents.

Moreover, Slate cites figure I’ve long emphasized: later next year, as deficit-financed tax cut and spending stimulus fade, growth will likely decelerate. This is the “end-of-sugar-high” scenario.

So, what’s missing from these careful, fact-based analyses? HISTORICAL PERSPECTIVE!

This ain’t our first trickle-down rodeo, and the outcomes thus far are just what those of us steeped in the folly of “supply-side” tax cuts have been arguing since Reagan. Let’s not be surprised by what we should have known was coming! [end]