When the Trump administration cut taxes I made the prediction that these cuts would no do what he claimed they would. Since then, I have followed up on the cuts to see what effect they are having.
This is, of course, a basic method in critical thinking: make predictions and then observe the results before asserting that the claims are or are not correct. Naturally one must take into account factors that can also influence the results. For example, the tax cuts might be doing good, yet be offset by some other factors so they appear to not be effective. Claims of offsetting factors must be backed up with evidence of their own, otherwise an ad hoc perpetual defense of anything would be possible. So what have the results been?
While the tax cut was claimed to benefit everyone, 60% of the benefits went to the top 20%. Trump has promised tax cuts for the middle class, but this seems to be eternally a promise made today for a tax cut tomorrow.
The tax cuts did not pay for themselves; corporate tax revenue dropped 31% in the first year of the cuts and general tax revenues have declined.
When a Democrat is President, Republicans rage against the deficit and use it to justify cuts in social spending. Under Trump, the federal deficit was $984 billion this year–unusually high. The tax cuts have a clear and obvious causal link to the deficit since less revenue (plus more spending) will create more debt.
There has been economic growth under Trump, but at 2.9% it is the same as it was under Obama in 2015. Projected growth for 2020 is 2%. As such, the tax cuts did not seem to help. To be fair, Trump’s trade wars are having a negative impact on growth so it is worth considering that growth could be worse without the cuts–but this should not simply be assumed.
On the positive side, the stock market is doing well–which is great for those whose wealth is composed mostly of investment. Unemployment is also extremely low. It is not clear how much impact the tax cuts had on this; to simply infer they caused these results would be to fall into the post hoc fallacy.
These results are utterly unsurprising. Tax cuts never pay for themselves and have consistently resulted in high deficits (especially when paired with increased spending). The possible boost to the stock market and reduced unemployment are certainly important points to consider–but the link must be tested rather than assumed.
In most ways assessing tax cuts does not matter; both parties have long-held talking points on tax cuts that drive the presence or lack of cuts. In general, the Republicans are wrong about more things but this hardly seems to matter to their policy making.