New York Times editorial, You Know Who the Tax Cuts Helped? Rich People:
When Republicans were pitching a massive tax cut for corporations and wealthy families last year, they promised voters many benefits: increased investment, higher wages and a tax cut that pays for itself. The tax plan, congressional leaders said, would turbocharge the American economy and provide a much-needed helping hand to working-class families.
“Most people, half the people in this country, live paycheck to paycheck, so there’s a lot of economic anxiety,” the House speaker, Paul Ryan, told The Times in November. “And I think just one of the key solutions is faster economic growth, more jobs. And I think the best thing we could do to deliver that is tax reform.”
So, more than six months since President Trump signed the tax cut into law, is it delivering on the promises Mr. Ryan and other leaders made? ...
The most notable outcome of the tax law is one that few Republicans talked about: Companies are buying back their own stock — a lot of it. Stock buybacks are expected to reach a record $1 trillion this year. After Congress reduced the top federal corporate tax rate from 35 percent to 21 percent, businesses are flush with cash. Lawmakers also let companies repatriate foreign earnings that they have been amassing at a rate of 15.5 percent for cash and 8 percent for other assets.
Thanks to the tax cut, the government will take in about 1 percent less in the 2018 fiscal year than it did the year before. Corporate tax revenue is plummeting — the C.B.O. predicts a drop of 27 percent this year. At the same time, the federal government will spend nearly 5 percent more, due, in large part, to Mr. Trump’s insistence on more defense spending.
Over the coming decades, the federal debt could nearly triple as a share of the gross domestic product if Congress makes the Trump tax cut and spending increase permanent, according to the Committee for a Responsible Federal Budget. Lawmakers have talked about extending the cuts in last year’s law beyond the next 10 years — something they did with some of the cuts passed during the George W. Bush administration. “I don’t know why we wouldn’t want to do that,” the Senate majority leader, Mitch McConnell, said in April.
Today, many Republicans seem to realize that the tax cut has become a political liability, which is why they aren’t talking about it ahead of the November election. Even they realize that it doesn’t do any of what they promised.