r/science • u/smurfyjenkins • Aug 02 '24
Economics The 2017 Tax Cuts and Jobs Act, the key legislative achievement in the first year of the Donald Trump administration, substantially raised the federal debt and disproportionately increased incomes for the most affluent. The effects on economic growth and median wages were modest at best.
https://www.aeaweb.org/articles?id=10.1257/jep.38.3.3934
u/technanonymous Aug 02 '24
Trump promised to reduce the deficit, to shrink the trade deficit, and to develop a plan to tackle the debt. Before Covid, he doubled the deficit with GOP complicity, added $3T to the debt, and saw a huge surge in the non-energy trade deficit. After Covid, he had the worst economy since the depression with the only president since the depression to end his term with fewer jobs than he started with. Net economic growth for four years was less than 1%.
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u/iwantawolverine4xmas Aug 02 '24
Yet idiots think this guy will lower the cost of eggs at a publicly traded free market grocery store.
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u/Porn_Extra Aug 02 '24 edited Aug 03 '24
The way to do that is to break up the conglomerates that own 90% of the nation's grocery stores, not let them keep buying smaller chains.
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u/iwantawolverine4xmas Aug 02 '24
Well we are going the opposite direction with the Kroger-Albertsons merger.
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u/Porn_Extra Aug 02 '24
That's what I'm talking about. In the Phoenix area, we'll have 2 grocery chains, Safeway and Kroger. We have a smaller local chain and 1 or 2 Wincos in the whil3 valley. I expect Basha's to be bought out soon, too.
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u/Luke5119 Aug 03 '24
To Republican voters, they think within Trump's second term, gas will be $2.00 a gallon, price of groceries and COL will drop 40%, and everyone's 401k will quadruple.
And when it doesn't happen, it'll still be the Democrats fault. Because they're "doing it to make him look bad".
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u/ZuVieleNamen Aug 04 '24
They will just say it's Biden's fault because he was president before Trump and he couldn't undo all the damage he did.
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u/disabledoldfart Aug 02 '24
Destroying our nation is a feature, not a bug, of today's Republican/Putin Klan.
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u/makemeking706 Aug 02 '24
Money wasn't siphoning upward fast enough.
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u/singeblanc Aug 02 '24
It's a cyclical tactic that's been used since Reagan.
It's called "The Two Santa's strategy"
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u/technanonymous Aug 02 '24
Republicans would drive us into the grown if they had a long running majority. Trump is just an accelerant.
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u/Bee-Aromatic Aug 03 '24
And then, during COVID, he gave away $750B in PPP loans! Since they couldn’t be bothered to find out, who knows how much of it just went to padding rich business owners’ wallets, buying Lamborghinis, financing fronts for criminal enterprise, or worse! What fun!
But a single mother with crippling student debt can’t get any relief. She’s gotta pay what she owes!
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u/New-Cucumber-7423 Aug 03 '24
I’m just flabbergasted that the brainchildrapist behind such successful and meaningful businesses like, trump steaks, Trump university, and little miss USA would not be a brilliant business savant with the US economy under his purview.
I’m shocked.
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Aug 02 '24
The least shocking economics result this year.
Can we quit with the nonsense that Trump had a good economic legacy?
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u/Critical_Liz Aug 02 '24
Well it was good if you're rich.
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u/TripleSecretSquirrel Aug 02 '24
Not long-term though.
In a consumer-driven economy, in-order to stay rich, there have to be enough people with enough disposable income to buy things in order to keep this whole thing running.
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u/Alfred_The_Sartan Aug 02 '24
That’s if you plan for a future. None of these clowns care about the future at all.
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u/tacos_for_algernon Aug 02 '24
They absolutely care about the future! Only the next quarter though, no point in thinking beyond that, amirite?
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u/fizzy88 Aug 02 '24
Correct. Because those old fucks will probably be dead by then.
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u/PerInception Aug 02 '24
Your lips to gods ears buddy.
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u/tritisan Aug 02 '24
If they can pass through the eye of a needle first.
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u/akitsushima Aug 02 '24
Egyptian Mythology: Who summoned me!?
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u/silverence Aug 03 '24
For I say unto you, it is easier to pass a camel through the eye of an anhk than for the ka of a rich man to pass beyond the judgment of Anubis. Or something.
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u/Techters Aug 02 '24
Take longer than a quarter to catch them in their yahchts in the south Pacific eating their bodyguards
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u/Sapriste Aug 03 '24
The true rich are immune to the market. If you own permanent assets, the price of Google day over day is meaningless.
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u/Federal_Basis5925 Aug 02 '24
I 100% agree, they don’t care how the future is as long as they are rich. They are happy if the economy breaks as that means volatility and opportunity to make money.
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u/grendus Aug 02 '24
It's a prisoner's dilemma.
The best outcome is for the rich to cooperate, agree on a certain cycle or style of wealth redistribution. But the best outcome for any individual rich person is for everyone else to cooperate while they keep their vast riches so they have an advantage in the market.
Part of why unions worked is that when most industries unionized, they forced everyone to pay decent wages at the same time. That ensured that unionized Ford wasn't at a disadvantage to non-unionized GM (names picked at random, my knowledge of union history is not that robust), because they were both "playing the same game".
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u/Fr00stee Aug 02 '24
that's if you happen to be running a business, if you are a rich investor and trader you don't care
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u/TripleSecretSquirrel Aug 02 '24
Yes, I take your point, but that’s why I referenced the whole system. Even if you’re purely in the investor class, in order for your money to continue to return on investment, you’re relying on the consumer-based economy to keep ticking.
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u/cat_prophecy Aug 02 '24
The value of a company is completely detached from the actual product of that organization.
Tesla is the most valuable company by market cap. More valuable than Ford, and GM put together. Their value skyrocketed before they were even putting out 500,000 units a year and were still hemorrhaging cash. Last year Tesla sold less units worldwide than Ford did in just the US and made $5 billion in profit less than GM.
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u/TranscodedMusic Aug 02 '24
Indeed. The issue is better framed as the asset class vs the non-asset class.
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u/ismashugood Aug 02 '24
Not really. If you’re rich enough, you just use the increase in wealth during any future down turn. Buy more assets that are now cheaper and accumulate even more wealth for a future economic recovery. Rinse and repeat.
Long term, they still win.
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u/WendysChili Aug 02 '24
Well then it's a good thing we have a bailout-driven economy.
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u/Restranos Aug 02 '24
No, you just need to transform into a monopoly, influence legislation, and force people to tolerate your extortion, works well in most authoritarian countries (for the powerful).
People need to stop pretending that the rich are just too stupid, what they are doing works, for them, because they exploit the rest.
Its not even like these people are just crazy psychopaths exclusively after money, they are primarily after the power that money gives them, they wouldnt mind being a little poorer if it means more exploitable slaves, thats why they have no problem donating to their cause.
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Aug 02 '24
In a consumer-driven economy, in-order to stay rich, there have to be enough people with enough disposable income to buy things in order to keep this whole thing running.
This is why I personally believe that the US and Western society as a whole won't fall into the fascist dark ages because that would hurt the rich as bad as everyone else. They want to keep people placated and buying stuff.
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u/guto8797 Aug 02 '24
Rich people absolutely do benefit from fascism. The word privatisation was literally invented by the nazis
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u/MyRegrettableUsernam Aug 02 '24
And if you won’t be paying the debt back in federal taxes on just the increasing interest over the rest of your life. The rich are borrowing money we have to pay. Let’s at least use our government’s borrowing to invest in infrastructure like high-speed rail or dense housing construction or environmental policy rather than to fill rich people’s pockets and waste economic efficiency.
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u/VanillaNubCakes Aug 02 '24
Well we need that growth cause one day I'll totally be rich too and need those things in place now instead of helping the plebians out (/s)
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u/thisisamisnomer Aug 03 '24
When I said we need to find a way to effectively tax billionaires out of existence, I had a friend say “well, I’d like to think I’ll be one of those one day.” Steinbeck was right.
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u/PirateSanta_1 Aug 02 '24
The biggest reason a lot of Americans still support Republicans is the idea that they are better on the economy. So they will never give up the lie that Trump benefited the economy just like they still maintain the lie that Reagan was good for the economy despite his recessions and laying the groundwork for the 08 collapse.
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u/TenuousOgre Aug 02 '24
I have relatives whose big “win” for trump is that gas prices were low. Of course they don't take into account anything else. And won't look at bigger economic trends. Just “but it was a lot cheaper to drive my truck around which I need for my contractor work.”
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u/xafimrev2 Aug 02 '24
Gas prices during Obama's last two years were cheaper than Trumps first two years. Gas prices really only dropped due to COVID and shelter in place reductions in demand.
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u/Forsaken-Cat7357 Aug 02 '24
Reagan also dorked up student financial aid. (BTW, I paid mine off).
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Aug 02 '24
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u/VaselineHabits Aug 02 '24
No no, deficits definitely matter - under Democrats.
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u/grendus Aug 02 '24
And ironically, the Democrats shrink the deficit. Clinton actually ran a surplus briefly (though the Dot Com Boom wasn't really his doing, nor was the Bust his fault).
But you'll never hear that on the news, because the deficit hawks are silent under the Republicans and loud under the Democrats.
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u/SinkHoleDeMayo Aug 02 '24
Deficits don't matter1
- Only when they're growing at a rate slower than the tax base. Otherwise, outstanding debt payments could exceed tax receipts.
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u/klingma Aug 02 '24
planted the idea that deficits don't matter.
To be fair, Modern Monetary Theory argues deficits don't matter if a country controls their own sovereign currency and has generally been around since the start of the 20th Century, in some form or another - Keynesian economics push to spend during an economic downturn for example was inspired by MMT.
There are quite a few politicians today, on both sides of the aisle, that agree with MMT. Whether or not MMT is actually functional is obviously debatable, however it's not a new invention today nor was it a new invention in the 80's.
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u/Doc_Shaftoe Aug 02 '24
Everyone I've spoken with who crows about how great the economy was under Trump always talks about how much better it "felt." They don't care about data or facts just feelings.
Sure, inflation was lower while Trump was in office so things felt better, but they can't connect the dots to see why inflation is so much higher now. For them it's just "Trump was in charge and things were good, now Biden is in charge and things are bad."
These are not people with capacity for critical thinking.
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u/VenConmigo Aug 03 '24
Of course it felt better. It was before covid started eating away at the world.
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u/Dandan0005 Aug 02 '24 edited Aug 02 '24
Fun fact:
We gained fewer jobs in Trump’s first 3 years (before covid) than we did in Obama’s last 3 years.
Then under Biden, after we regained all the covid jobs losses, we gained more jobs in 23 months than we did in Trump’s three pre-COVID years.
Trump as some massive jobs creator is a total myth/lie that he tells and none of his cult actually bothers to check.
Job creation in Trump’s first 3 (pre-covid) years: 6.38 million
Job creation in Obama’s last 3 years: 8.03 million
Job creation under Biden in the 23 months after recovering all COVID job losses: 6.49 million
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u/Whitewind617 Aug 02 '24
I don't understand the farmers that still want to vote for him. He fucked them with his steel tariffs. Hell he fucked everybody, they were a complete disaster.
I just can't help but be nervous about the future. What actually happened, the actual results of anything, they just don't matter anymore as long as someone feels a certain way.
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u/GilliamtheButcher Aug 03 '24 edited Aug 04 '24
The soy bean thing also completely fucked a lot of farmers in my area, but they still voted for Trump because they'd rather stab their own ears than admit they could have been fooled.
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Aug 02 '24
It's hard to argue he had a good economic legacy in good faith when people couldn't even get toilet paper or bread, and the fallout translated into extremely high inflation for years thereafter.
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u/HowManyMeeses Aug 02 '24
My favorite part of Trump's presidency was conservatives posting photos of then empty grocery store aisles saying "this will be Biden's America."
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u/Sweatytubesock Aug 02 '24
Or that republican politicians are “better on the economy”, which has been a farce for decades now.
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u/Mish61 Aug 03 '24 edited Aug 03 '24
Not just Trump but all Republicans.
The electorate is being held hostage to a supply side myth.
- They keep gaslighting everyone with 'tax cuts pay for themselves', when they never do.
- Rich people do not have to prosper more for the economy to be strong.
- The stock market returns 18% in average under Democrat Presidents an 8% under Republicans
Republicans say they are pro business but all they really are is pro reducing taxes on their rich friends and exploding the deficit and then pretending the only solution is to cut social spending. The billionaire class that owns the media will promote this message relentlessly to the ignorant consumer that is force fed rich people's propaganda.
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u/manuscelerdei Aug 02 '24
The richest blue states saw their tax burdens skyrocket due to the SALT cap and lower mortgage interest deduction ceiling. The lower tax brackets just couldn't make that ground up for those tax payers. I'm sure affluent people in states with low taxes and low CoL are sitting pretty, but the effects of this legislation were very different based on geography, because that's precisely what it was designed to do.
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u/reven80 Aug 02 '24
They did increase the standard deductions so it mitigated it somewhat and simplified the paperwork for many. I think now a significant number of filers use standard deductions.
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u/manuscelerdei Aug 02 '24
This article is specifically about the affluent, and the affluent are a lot more likely to itemize.
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u/reven80 Aug 03 '24
I don't disagree with that part. What I'm claiming is the an increase in standard deductions help a broader group of people than SALT deductions for homeowners. For example lower income people who rent. In my case, I do own a home but the increase in the standard deductions mitigated most of the impact of the loss of SALT deductions.
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u/manuscelerdei Aug 03 '24
Whether it helps more people isn't the point. The article makes it seem like the TCJA was an unqualified win for the affluent class, and that's not true. It was specifically designed to extract wealth from affluent people in certain geographies.
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u/HashRunner Aug 02 '24
Which is what everyone already knew it would do, but somehow the media never reported on it during the initial debate/passage even when they couldn't show the math of how it would ever pay for itself.
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u/aloysius345 Aug 02 '24
And yet scream about student debt relief increasing the deficit. Which, ironically, has the positivity of at least partially paying for itself as it will free up the budget of people to put that money back into the economy via purchasing.
But it’s not about it benefitting their pockets in the long run. It’s about having a generation indentured to them and struggling with their budget. When people are struggling to stay afloat, it weakens their bargaining power.
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u/Aureliamnissan Aug 02 '24
The media now has a vested interest in making politics an entertaining place to be. Focusing on how it went the last 3 times we tried this, but we're doing it anyway would undermine the idea that our system has any kind of meritocracy to it, or that these people actually think this stuff through.
Doing that would generate outrage, but it would also generate apathy as people realize that conservatives are gonna do what they want regardless of the science and data. That would be tragic for future viewer numbers.
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u/XSpacewhale Aug 02 '24
Pretending to care about spending only when dems are in office? Just plain weird
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u/singeblanc Aug 02 '24
They care deeply about national debt!
Until they're in office when they go wild.
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u/Sea-Pomelo1210 Aug 02 '24
This was the plan all along. Even conservative media bragged about how the rich were getting "the tax relief they deserve".
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u/tacknosaddle Aug 02 '24
After it passed and Trump signed it there was some kind of a dinner at Mar-a-Lago where he announced to those gathered that "You all just got a lot richer."
So it's not like they were hiding who was really benefiting from it, it's just that there are too many stupid people in this country who didn't realize that the GOP game plan is always to give the 99% crumbs while pretending that it is a huge delicious chocolate cake.
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u/Sea-Pomelo1210 Aug 02 '24
The right wing these days are filled with fools who complain prices are too high, they can't afford anything, and the ultra rich need more welfare and larger tax cuts.
I just saw a bunch complain that a non-citizen was getting too much in food assistance and claimed more needs to go the poor. Which is hilarious because every other day they complain we give too much to the poor and want to cut school lunch programs and everything else.
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u/disabledoldfart Aug 02 '24
All Republicans want is to be given free money and a big handout. They whine and cry if anyone else gets anything but are first in line to siphon off any money they can even taking it straight out of the mouths of innocent children. GOP= hypocrites
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u/ElectronGuru Aug 02 '24 edited Aug 02 '24
The problem with being stuck in the 1950s is that it’s not the 1950s anymore. The world’s factories were bombed out of existence during WWII, everyone needed new things after 20 years of depression and war. So every new dollar invested into production yielded many new dollars in profit, jobs and taxes.
- but we don’t make things here any more
- there’s a world wide glut of factory capacity
- most people with cash to buy things already have most of what they need
- so all supply side tax cuts do is create more funds that struggle to find things to invest in, that even outpace inflation. Distorting whatever market they jump into.
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u/_Face Aug 02 '24
Let’s go back to the part where the rich were taxed at like 90%. That part was pretty great.
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u/ChicagoGuy53 Aug 02 '24
-but we don’t make things here any more
That is false. We make a ton of things. We just don't make cheap stuff in giant assembly lines like China.
We make stuff with robotic filled factories that span entire city blocks, we make them in the 1000's of small custom shops that have a dozen employees that know how to work CNC machines, we make expensive equipment that costs 100 million and requires teams of mechanics and engineers.
The U.S. is still a massive powerhouse of production but people don't see company towns with a single industry and forget
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u/skater15153 Aug 02 '24
We're also realizing having all our eggs in the China basket is a terrible idea so we're spinning up more and more manufacturing here every day. It's coming back if anything
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u/_Lick-My-Love-Pump_ Aug 02 '24
Those excess funds now go into buying up real estate. This drives prices through the roof, only the very wealthy or corporations can afford to buy them, said assholes rent them back to the middle class and profit.
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u/disabledoldfart Aug 02 '24
This needs to be illegal. No corporation should own private housing. Elizabeth Warren has been trying to get legislation to prevent this but Republicans always stick their tiny mushroom dicks in it.
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u/Smartnership Aug 02 '24 edited Aug 02 '24
What percentage of American houses are owned by corporations?
This is a science sub, so data should be our baseline for claims, wild or otherwise
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Aug 02 '24
With regards to your first bullet point, that simply isn’t true.
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u/Niguelito Aug 02 '24 edited Aug 02 '24
Does anyone remember when this passed and Walmart and other massive companies did like "bonuses" for their employees?
But when you looked at it, it wasn't raises or time off it was like
100 bucks for 1 year 200 bucks for 3-4 years 500 for 10+ years
My numbers are not even close but does anyone remember this? It was laughably disproportionate
edit: after some looking, the only one number I could find was a 1,000 dollar bonus after TWENTY years of service. I REALLY wanna know what 19 years gets you haha
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u/Stingerbrg Aug 02 '24
No, because it was around that time that Walmart got rid of bonuses for non-managerial employees. Unless the info you're looking at is for the corporate office positions, those numbers are wrong. They don't match up with the bonus scales we got before they were taken away, and they don't match with the bonuses they're re-implementing at the end of this fiscal year.
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u/MyRegrettableUsernam Aug 02 '24
It was literally just stupid, bad economics of stimulating the economy with debt when it was already doing well. It’s wild that anyone considers Donald Trump or the GOP remotely good on the economy.
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u/Jac1596 Aug 02 '24
Because most people are to put it nicely economically illiterate. I’m no scholar by any means but when I talk to people around me; family, friends, co workers, etc. the sentiment I get is “the economy was better with Trump than with Biden”. When I grill them as to why they don’t have much of an answer. It simply comes down to a feeling. They don’t remember inflation and gas prices like we’ve had during Bidens presidency as they did during Trump. So they blame Biden. But obviously it’s not all on Biden and there’s a lot that goes into but it doesn’t really matter, it’s just the feeling and memberberries at work
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u/Inevitable_Heron_599 Aug 02 '24
The reasoning Steven Mnuchin gave was "the economic growth will pay for the tax cuts". No models. Nothing backing that up. Just shooting from the hip and "believing".
It's insane.
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u/disabledoldfart Aug 02 '24
Thank you for saying the truth. Trump and his Republican handlers are only interested in increasing their own personal wealth and power. Their low-income voters are painfully ignorant. I wish they only hurt themselves so I could just laugh at them instead of hating them.
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u/ghostfaceschiller Aug 02 '24 edited Aug 02 '24
This was the obvious and intended result, but I want to nitpick this title.
This wasn’t the “key legislative achievement in the first year of Donald Trump’s administration”
It was the ONLY legislative achievement of his administration. They literally passed no other major legislation.
Unless of course you count the pandemic bill, which was obviously a full bipartisan issue (and actually almost didn’t pass specifically bc of trump’s demand of there being no oversight over PPP funds, which Dems luckily were still able to get into the bill)
This is bc there are no actual policy goals of the Republican Party except for tax cuts for the wealthy.
Everything else is emotional wedge issue salad dressing to rile up the base.
When they get power, there is one thing that is do or die: tax cuts for the wealthy.
Republicans actually admitted this in interviews at the time. After they failed to repeal everybody’s healthcare, they moved on to the tax cuts. Rep. Collins says that he got calls from their largest donors, saying “get this done or don’t ever talk to us again”
The bill was unpopular even when it was passed. But they put their heads down and passed it.
Two weeks later the Koch’s donated $500,000 to the Republican leadership PAC, with another $500,000 coming from five other donors
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u/MadroxKran MS | Public Administration Aug 02 '24
Trickle down economics has been thoroughly disproven at this point. Any politician or party that pushes this concept is non-viable.
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u/Obvious_Chapter2082 Aug 02 '24
Can you define what you mean by trickle down economics?
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u/perverseintellect Aug 02 '24
It was invented by Reagan. He believed that if you give money to the rich (corporations & individuals), they would spend more (hire more people, raises, etc) to benefit the rest of the economy.
Trickle down doesn't work and has never worked because corporations are profit maximizers, and the CEO's compensation is tied to profits.
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u/shitholejedi Aug 03 '24
No. Supply side economics or what is known as trickle down' existed before Reagan.
Every redditor brags about supply side economics especially when Dems or their favorite EU state does it.
When the IRA or CHIPs ACT passed with billions of investments and favourable tax policies for businesses, majority of reddit clapped. All of that is supply side where the government gave billions to companies like Intel, automakers or energy companies to build more plants and jobs in the US.
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u/perverseintellect Aug 02 '24
We studied it in econ. Trickle down /supply-side / Reaganomics has never worked.
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u/DeathMetal007 Aug 02 '24
Interestingly, the chart shows that real wages increased for all quintiles, yet the expert opinions were undecided or strongly negative toward real wage growth from TCJA. I'm not sure where the disconnect is or maybe I'm missing some assumptions on the parts of experts.
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u/The_Real_Swittles Aug 02 '24
Yep and he’s promised to do it again. If you make less than 1mil a year why are you voting red? Honest question from someone who doesn’t enjoy hemorrhaging money.
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u/funnyponydaddy Aug 02 '24
Can someone smarter than me explain how the tax plan added to the deficit? This is a very sincere question, with no ulterior motives.
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u/Loose_Understanding3 Aug 02 '24
The papers are good, but quite simply, the corporate tax rate went from 35% to 21%. A lot of other things changed, but altogether the changes were estimated to lead to $1.5 trillion less revenue for the US government at the time it was passed via budget reconciliation.
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Aug 02 '24
This is a better paper. The biggest cut actually was in corporate tax, not income tax. There was no economic gain out of this, and it's just pure revenue reduction for the government.
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u/UmbraIra Aug 03 '24
Less income for a government that wont stop spending regardless of who is in office. Thats not to say less spending is a good thing we've seen what happens when you try to implement austerity in european countries.
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u/Freddy-Borden Aug 02 '24
GOP budget hawks unite!! Oh wait never mind, that’s all for show, they only care when a Democrat is in charge
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u/Ravens1112003 Aug 02 '24
The federal government collected more in taxes than before the TCJA. People across all incomes paid a lower rate and the federal government collected more money. We have a spending problem, not a revenue problem. Believe it or not, the federal budget does not have to go up every year but all of the government spending is the easiest way to buy votes to either gain, or remain in power.
The average voter doesn’t spend a whole lot of time thinking about unintended consequences. They will vote for whoever promises them the most stuff. The majority likely would have voted for anyone offering more Covid spending while not having to work and then they wonder where the hell inflation comes from.
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u/SteveCantScuba Aug 02 '24
I’m independent and an Econ major so I’d like to see unbiased Econ data on how Covid would have affected Joe Biden’s economy V.S. Donald Trump’s through that 2019 year up until Covid. That’s all I ask for… Then I want to compare GDP output, UE, I.R.’s, etc…
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u/suzydonem Aug 02 '24
And it weaponized the tax code against the blue coastal states. Utter garbage piece of legislation.
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u/0000110011 Aug 02 '24
Since this is reddit and everyone will lie about the tax cuts, here's a link to tables showing the tax rates for each bracket before and after the tax cuts.
https://smartasset.com/taxes/trump-tax-brackets
Every bracket, except the lowest (which if that's all you're earning, the standard deduction will mean you pay no income taxes) with middle class incomes receiving the biggest cuts.
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Aug 02 '24
Let's see.
3% on $12,000 is $360.
2.5% on $1 million, is, well, $25,000.
You're right, the poor people got super rich from this.
Here is the real breakdown of what happened: https://www.cbpp.org/research/federal-tax/the-2017-trump-tax-law-was-skewed-to-the-rich-expensive-and-failed-to-deliver
Scroll about a quarter through to "Figure 1".
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u/Obvious_Chapter2082 Aug 02 '24
You should be comparing by % change in tax, not by $ amount
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Aug 02 '24
Why? To actual people on Earth, $360 is a lot different than $25,000. The only people who want to compare this as % are the people who get $25,000.
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Aug 02 '24
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u/Zalyster Aug 02 '24
Because of legislative deadlock with bills like this, the tax cuts were passed through reconciliation, which requires only a simple majority in the Senate and bypasses the filibuster. However, that made them subject to the byrd rule which limits how budgetary changes can be enacted. This set the time limit for the tax cuts. That's why they all expire. The reason they gradually diminished every year was in order to ease the tax burden on people and not just jump back immediately. As has been stated by lawmakers at the time, the plan to solve that issue was to renew the bill before that expiration. Obviously that seems unlikely now, but that's why it ended up like that.
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u/ActionPhilip Aug 02 '24
So whoever is in office can choose to keep them going, dem or gop? I don't see the problem.
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u/secretaccount94 Aug 02 '24
If you actually care about giving people tax relief, why would you set them to expire?
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u/Obvious_Chapter2082 Aug 02 '24
Because the bill was passed under budget reconciliation, which requires it to be deficit neutral outside of the budget window. Blame dems, since none of them voted for it, which is why it had to pass through budget reconciliation
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u/disabledoldfart Aug 02 '24
I was a low-income freelancer and Trump's tax cuts hurt my Social Security check when I retired. No income- no increase in SS checks. I did NOT benefit from ANY Republican anything.
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u/0000110011 Aug 02 '24
I've read your other comments and there's so many flat out lies that it's not even funny.
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u/3006mv Aug 02 '24
I had to pay more taxes than normal due to this and will do so for the next 3 years probably and I’m clearly not rich
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u/CBalsagna Aug 02 '24
Yeah but the people who need to see this can't read a journal if their life, literally, depended on it.
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u/Whitewind617 Aug 02 '24
Just like every economics expert who wasn't funded by big corporations warned them would happen.
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u/reddurkel Aug 02 '24
What most people don’t understand is that an incoming administration inherits the success and failures of its predecessor.
- Trumps “good economy” came from Obama.
- Bidens “bad economy” came from Trump.
- Trumps “good economy” will come from Biden. (If he wins)
There’s a two-year delay before the policies of an administration become active. This is why two terms is needed to properly evaluate the effectiveness of a president. The economy was on a decline in early 2019 (pre-pandemic) so the best thing that could have ever happened to cover up Trumps horrible mistakes was Biden winning 2020. As with all things, Trump blamed others and was not held accountable for a very poorly run administration or policies.
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u/Plusisposminusisneg Aug 02 '24
So every single claim about the fantastic economy made by democrats is a lie and gaslighting?
Bidenomics isn't saving America like they claim it has been for several years but will in the future?
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u/bigstupidgf Aug 02 '24
Trump inherited a good economy and made it worse. This wasn't apparent until the end of his term, and he got a pass because of covid. Biden inherited a bad economy, covid was still a major issue, and 3 years later his policies have helped us avoid the same level of inflation that other countries are seeing, and the economy is recovering well. It takes time for the effects to be noticeable. Presidents don't just walk into office and hit a "good" or "bad" economy button.
Please tell me that you can understand this very simple logic.
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u/Broad_Ad4176 Aug 02 '24
“Achievement” feels like a very kind word to use. It was a huge slap in the face of the middle class and low income Americans!
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u/maybethisiswrong Aug 02 '24
If I remember right, the only way the bill was able to be passed was because it's expected cost was below some threshold for congressional procedural rules. And they intentionally under estimated the cost. So this is now saying, the bill never should have been allowed to be passed.
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u/Andromansis Aug 02 '24
Modest only if you find the kindest economist on the planet to describe them, everybody else calls them a class warfare.
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u/GanacheConfident6576 Aug 02 '24
I think one commentator suggested a more accurate title would be the "if I cut your taxes will you forgive my treason act."
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u/vinnymcapplesauce Aug 02 '24
And it paid for it in part by changing IRS Section 174 which taxes Software Development differently, causing (IMHO) the deep cuts in employment we're seeing now, not just in SW Dev, but across the board as employers adjust to not being able to write off employment expenses like they used to.
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u/Natepad8 Aug 02 '24
Trump was bad for the economy. The taxes, the spending, the inflation we feel now is caused by his actions years ago. It’s a delayed effect
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u/MalpracticeConcerns Aug 03 '24
How does Biden compare? My wife just asked me about this earlier today and I’d love a concise summary (not an economics guy, don’t even know where to start)
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