Economists from top universities and the U.S. Treasury, in a recent report, concluded that the Trump corporate tax reform had a positive impact, leading to increased business investment, economic growth, and higher wages for workers.
The tax cuts resulted in little impact on government revenue due to an expanding economy.
The study found that firms impacted by the policy changes increased domestic investment by about 20 percent in the subsequent two years. (Trending: Photos Released Of Cocaine Found In White House)
Taxes actually do matter (Part I). Companies that saw larger reductions in tax rates from the TCJA also experienced larger increases in investment in the years that followed.
From a cool new paper by @gchodorowreich @omzidar Eric Zwick & Matthew Smith pic.twitter.com/KL85iutprY
— Jason Furman (@jasonfurman) October 20, 2023
James Freeman said in his summary of the report, “The results of the Trump corporate tax reform were more business investment, more growth, more wages for workers—and little impact on government revenue as lower corporate tax rates were offset by an expanding economy. Game, set, match.”
The economists in the study explained, “in our model, the dynamic labor and corporate tax revenue feedback in the first 10 years is less than 2% of baseline corporate revenue, as investment growth causes both higher labor tax revenues from wage growth and offsetting corporate revenue declines from more depreciation deductions.”
Tax Foundation’s Alex Durante and William McBride wrote that the study was “based on a large sample of 12,000 corporate tax returns covering several years prior to the enactment of the TCJA and two years after.” (Trending: Court Hands Down Crucial 2nd Amendment Ruling)
Adding, “The authors find that, on average, firms impacted by the policy changes increased domestic investment by about 20 percent in the subsequent two years relative to firms with no tax change.”
Even Jason Furman, a former chairman of the Council of Economic Advisers during the Obama administration, acknowledged the positive effects of the tax cuts.
Furman posted, “Taxes actually do matter … Companies that saw larger reductions in tax rates from the TCJA also experienced larger increases in investment in the years that followed” to his social media account.
President Biden unintentionally conceded that the Trump tax cuts were working, as the federal treasury saw a substantial increase in revenue.
The report suggests that a growing economy generates more revenue for the Treasury, and the economy’s growth has been comparable to the growth experienced during Ronald Reagan’s first term.
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