Trump Economist Kevin Hassett: Tax Cuts Are Trickling Down to You

By Jonathan Chait
@jonathanchait

April 18, 2018
8:55 am


Kevin Hassett, chairman of the Trump administration’s Council of Economic Advisers, argues that, contrary to public opinion, the Trump tax cuts have already been a rousing success. Hassett’s argument, laid out in a Wall Street Journal op-ed, is that anything that increases the profitability of business by definition helps workers. If you think otherwise, you are some kind of commie.

“Opponents [of the Trump tax cut], echoing leftists from Marx to Piketty, describe those provisions as giveaways to the wealthy at the expense of the working class. They’re wrong,” he says, because, “When profits go up, capital investment goes up, and wages follow.”

There is large amount of data, supported by a deepening field of theory, that suggests something very different. The current economic recovery has seen corporations accumulate large stocks of capital that they have failed to invest. Profits have grown, but — contrary to Hassett’s simple tautology — wages have not followed. There has been a large and persistent increase in the share of national income going to corporate profits:




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