“Two years ago today, Republicans in Congress passed a sweeping tax cut,” writes NPR’s Scott Horsley. “It was supposed to be a gift-wrapped present to taxpayers and the economy. But in hindsight, it looks more like a costly lump of coal.”
Horsley, NPR's chief economics correspondent, says the economy appears to have received a short-term boost from the tax cuts, but the effect wore off quickly. Overall, the tax cut package pushed through Congress on a party-line vote has failed to fulfill its promises, he says, providing details on some key issues:
- While President Trump said the tax cuts were meant to help “the folks who work in the mailrooms and the machine shops of America," more than half of the tax savings went to the top 20% of the income distribution, and corporations received the biggest cuts.
- Trump portrayed the tax cuts as “rocket fuel for our economy" and Senate Majority Leader Mitch McConnell said “America is ready to take off” when the tax cuts passed, but the economy grew at the same pace in 2018 (2.9%) that it did in 2015.
- Treasury Secretary Steven Mnuchin said the tax plan would pay for itself, but we’re facing $1 trillion deficits for years to come instead. “The tax cuts were never going to — and have not — come anywhere close to paying for themselves," said Maya MacGuineas of the Committee for a Responsible Federal Budget.
The Washington Post’s Catherine Rampell also took aim at the GOP tax cuts this week, saying Thursday that they were like a toddler who is “way behind on nearly all its developmental milestones.” Hitting on many of the same points as Horsley, Rampell mockingly proclaimed, “Welcome to your terrible twos, GOP tax cuts!”
And lest you think the bad reviews are only coming from the ostensibly liberal mainstream media, journalists aren’t the only ones offering critical remarks.
Earlier this week, Senate Finance Committee Chairman Chuck Grassley was asked about how the tax law would affect Trump in the 2020 election. The Iowa Republican said that while it probably wouldn’t hurt the president, “it definitely hasn't been any help to us." Most Americans received some kind of tax cut, Grassley said, but it was too small for most people to notice in their paychecks. "You don't notice it, so you don't even think about it," he said.