FactCheck: have the Trump tax cuts led to lower unemployment and higher wages?
"Tax Cuts and Leprechauns (Wonkish)"
September 3, 2018 6.09 am AEST
Author Fabrizio Carmignani Professor, Griffith Business School, Griffith University
Reviewer Saul Eslake Vice-Chancellor’s Fellow, University of Tasmania
Disclosure statement
Fabrizio Carmignani has received funding from the Australian Research Council for a project on the estimation of the piecewise continuous linear model and its macroeconomic applications.
Saul Eslake does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
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The evidence on the ground is very clear. The Trump tax cuts have led to stronger investment, stronger growth, lower unemployment rate and higher wages. – Minister for Finance Mathias Cormann, interview on RN Breakfast, August 13, 2018
After two years of debate and months of intense negotiation, the government’s proposal to cut the corporate tax rate from 30% to 25% for companies with turnover of more than A$50 million was voted down in the Senate.
But while the government’s attempts to pass tax cuts in Australia were not fruitful, tax reform remains a significant international issue.
In arguing for a tax reduction for big business, Minister for Finance Mathias Cormann pointed to economic outcomes in the United States, where corporate tax rates were cut from 35% to 21% in January this year.
“If you look at the economic data in the US in the second quarter, of course post the Trump tax cuts, the US is recording in excess of 4% growth on an annualised basis, the unemployment rate now has a ‘three’ in front of it, and wages growth is the strongest it’s been in a very long time,” Cormann said.
“Massive, massive capital investment has been returned to the United States.”
Is that right? And if yes, are the tax cuts to thank? Let’s take a closer look.
Checking the source
In response to The Conversation’s request for sources and comment, a spokesperson for Cormann provided GDP and capital investment data from the US Bureau of Economic Analysis, employment data from the US Bureau of Labor Statistics, a Bloomberg article, and a January 2018 World Economic Outlook from the International Monetary Fund.
Minister for Finance Mathias Cormann’s statement that corporate tax cuts in the US had “led to stronger investment, stronger growth, lower unemployment rate and higher wages” is not supported by evidence.
Trump supporters demonstrated before the first Democratic presidential debate on Wednesday.CreditCreditScott McIntyre for The New York Times
What did you think of the bunch of socialists you just saw debating on stage?
Wait, you may protest, you didn’t see any socialists up there. And you’d be right. The Democratic Party has clearly moved left in recent years, but none of the presidential candidates are anything close to being actual socialists — no, not even Bernie Sanders, whose embrace of the label is really more about branding (“I’m anti-establishment!”) than substance.
Nobody in these debates wants government ownership of the means of production, which is what socialism used to mean. Most of the candidates are, instead, what Europeans would call “social democrats”: advocates of a private-sector-driven economy, but with a stronger social safety net, enhanced bargaining power for workers and tighter regulation of corporate malfeasance. They want America to be more like Denmark, not more like Venezuela.
Leading Republicans, however, routinely describe Democrats, even those on the right of their party, as socialists. Indeed, all indications are that denunciations of Democrats’ “socialist” agenda will be front and center in the general election campaign. And everyone in the news media accepts this as the normal state of affairs.
Which goes to show the extent to which Republican extremism has been accepted simply as a fact of life, barely worth mentioning.
To see what I mean, imagine the media firestorm, the screams about lost civility, we’d experience if any prominent Democrat described Republicans as a party of fascists, let alone if Democrats made that claim the centerpiece of their national campaign. And such an accusation would indeed be somewhat over the top — but it would be a lot closer to the truth than calling Democrats socialists.
----- [EXCERPT outed here.. The difference is that in Europe, far-right populist parties are often an alternative to the mainstream. In the United States, the Republican Party is the mainstream.
“That’s the tragedy of the American two-party system,” Mr. Greven said. In a multiparty government, white working-class populists might have been shunted into a smaller faction, and the Republicans might have continued as a “big tent” conservative party. Instead, the Republican Party has allowed its more extreme elements to dominate. “Nowhere in Europe do you have that phenomenon,” he said.
The Democrats fall closer to mainstream left and center-left parties in other countries, like the Social Democratic Party in Germany and Britain’s Labour Party, according to their manifestos’ scores.] -----
that used analysis of party platforms to place U.S. political parties on a left-right spectrum along with their counterparts abroad. The study found that the G.O.P. is far to the right of mainstream European conservative parties. It’s even to the right of anti-immigrant parties like Britain’s UKIP and France’s National Rally. Basically, if we saw something like America’s Republicans in another country, we’d classify them as white nationalist extremists.
True, this is just one study. But it matches up with lots of other evidence. Political scientists who use congressional votes to track ideology .. https://voteview.com/articles/party_polarization .. find that Republicans have moved drastically to the right over the past four decades, to the point where they are now more conservative than they were at the height of the Gilded Age.
Or just compare the G.O.P., point by point, with parties almost everyone would classify as right-wing authoritarians — parties like Hungary’s Fidesz, which has preserved some of the forms of democracy but has effectively created a permanent one-party state.
Fidesz has cemented its power .. https://www.vox.com/policy-and-politics/2018/9/13/17823488/hungary-democracy-authoritarianism-trump .. by politicizing the judiciary, creating rigged election rules, suppressing opposition media and using the power of the state to reward the party’s cronies while punishing businesses that don’t toe the line. Does any of this sound like something that can’t happen here? In fact, does any of it sound like something that isn’t already happening here, and which Republicans will do much more of if they get the chance?
One might even argue that the G.O.P. stands out among the West’s white nationalist parties for its exceptional willingness to crash right through the guardrails of democracy.Extreme gerrymandering, naked voter suppression and stripping power from offices .. https://www.vox.com/policy-and-politics/2018/12/4/18123784/gop-legislature-wisconsin-michigan-power-grab-lame-duck .. the other party manages to win all the same — these practices seem if anything more prevalent here than in the failing democracies of Eastern Europe.
Oh, and isn’t it remarkable how blasé we’ve become about threats of legal persecution and/or physical violence against anyone who criticizes a Republican president?
So it’s really something to see Republicans trying to tar Democrats as un-American socialists. If they want to see a party that really has broken with fundamental American values, they should look in the mirror.
But that won’t happen, of course. Whoever the Democrats nominate — even if it’s Joe Biden — Republicans will paint him or her as the second coming of Hugo Chávez. The only question is whether it will work.
It might not, or at least not as well as in the past. By spending decades calling everything that might improve Americans’ lives “socialist,” Republicans have squandered much of the accusation’s force. And Donald Trump, who was installed in office with Russian help and clearly prefers foreign dictators to democratic allies, is probably less able to play the “Democrats are unpatriotic” card than previous Republican presidents.
Still, a lot will depend on how the news media handle dishonest attacks. Will we keep seeing headlines that repeat false claims (“Trump Says Democrats Will Ban Hamburgers .. https://newrepublic.com/article/153187/potency-republicans-hamburger-lie ”), with the information that the claim is false buried deep inside the article? Will we get coverage of actual policy proposals, as opposed to horse-race analysis that only asks how those proposals seem to be playing?
Benjamin Wittes' list of Trump's aggression against the paramount law enforcement agency of the U.S.A. is the form of reminder we should be given repeatedly. Notes of his list in that video - Comey firing - attacks on AG Sessions - attacks on Dep. AG Rosenstein - attacks on Special Counsel Mueller - attacks on named, as Andrew McCabe and James Baker - attacks on line agent Peter Strzok Wittes says Trump's behaviour is "unprecedented" and "profoundly dangerous". i just stuck in some of the names. P - Brian Klaas's concern that Trump's authoritarianism may not be a blip, because his and his administration's actions are fundamentally changing institutions in the U.S.A. go to this one P - Former Federal Judge: Trump Is Packing the Courts with Unqualified Conservative Extremists
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