The Trump Tax Cut: Even Worse Than You've Heard - Paul Krugman
Source: New York Times
The Trump Tax Cut: Even Worse Than You’ve Heard
Skeptical reporting has still been too favorable.
By Paul Krugman
Opinion Columnist
Jan. 1, 2019
The 2017 tax cut has received pretty bad press, and rightly so. Its proponents made big promises about soaring investment and wages, and also assured everyone that it would pay for itself; none of that has happened.
Yet coverage actually hasn’t been negative enough. The story you mostly read runs something like this: The tax cut has caused corporations to bring some money home, but they’ve used it for stock buybacks rather than to raise wages, and the boost to growth has been modest. That doesn’t sound great, but it’s still better than the reality: No money has, in fact, been brought home, and the tax cut has probably reduced national income. Indeed, at least 90 percent of Americans will end up poorer thanks to that cut.
Let me explain each point in turn.
First, when people say that U.S. corporations have “brought money home” they’re referring to dividends overseas subsidiaries have paid to their parent corporations. These did indeed surge briefly in 2018, as the tax law made it advantageous to transfer some assets from the books of those subsidiaries to the home companies; these transactions also showed up as a reduction in the measured stake of the parents in the subsidiaries, i.e., as negative direct investment (Figure 1).
But these transactions are simply rearrangements of companies’ books for tax purposes; they don’t necessarily correspond to anything real. ...
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Read more: https://www.nytimes.com/2019/01/01/opinion/the-trump-tax-cut-even-worse-than-youve-heard.html
= new reply since forum marked as read
Don't take this personally, Eugene, as I'm speaking generally, but I wish people would quit linking to articles that are behind a paywall. Just because the poster is willing to pay money to read something does not mean that I am.
That comment is just so je n'ais c'est quoi. If you read NYT.com so often that you hit the limit immediately, maybe stop being a selfish freeloader and start paying for your own subscription? You understand they aren't a non-profit, unpaid volunteer organization, right?
And a long-standing rule is not more than 3 paragraphs may be quoted from an article. DU got sued years back over quoting whole articles if I recall correctly.
