Trump's Tax Cuts: Everything The President Promised Or An Utter Failure?

James Pethokoukis

The New York Times is highlighting FedEx as an example of how much of Corporate America “has not made good on its promised investment surge from President Trump’s 2017 tax cuts.” Then the piece goes on: “A New York Times analysis of data compiled by Capital IQ shows no statistically meaningful relationship between the size of the tax cut that companies and industries received and the investments they made.”

So the Trump tax cuts failed? And if so, should we totally undo them and return to the old 35 percent top tax rate and investment expensing rules? All of the top Democratic presidential candidates would probably answer “yes” to the first question, with many also answering “yes” the second. (Other Democrats would raise the corporate to somewhere between 21 percent and 35 percent.)

But caution here is warranted. Do we really know that the tax cut “failed,” over and done? As former Obama White House economist Jason Furman wrote for the recent AEI blog series on the Trump tax cuts:  “Even if we could extract the signal from the noise, it is too early to tell whether the law is living up to its goal of increasing business investment and capital stock over the medium and long run,” while adding that “there is little reason to believe the TCJA substantially boosted investment to date.”

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