WASHINGTON D.C. – In case you missed it, PoliticoPro reported that a Congressional Research Services (CRS) report found that the GOP Tax Bill signed into law last year has had little economic impact during its first year of implementation. And according to the CRS report, ordinary workers had very little growth in wage rates.
Just last month, the New York Times reported that an Institute on Taxation and Economic Policy report found that Brown’s Working Families Tax Relief Act would cost significantly less than the Republican Tax Bill that was signed into law last year. Brown’s bill would cut taxes for workers and families by expanding the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), benefitting 4 million Ohioans, including 1.7 million children in the state.
The PoliticoPro article can be read below.
PoliticoPro:TCJA had little effect on growth, government agency says
By Brian Faler
A new government report is throwing cold water on Republicans' claims that their 2017 tax cuts are responsible for the strong economy.
The nonpartisan Congressional Research Service says the law, H.R. 1 (115), had little impact during its first year on either growth, wages or business investment.
"On the whole, the growth effects tend to show a relatively small (if any) first-year effect on the economy," the nonpartisan agency says, noting the gross domestic product grew last year by 2.9 percent, which was about what budget forecasters had anticipated before the cuts.
"Ordinary workers had very little growth in wage rates," said the report, entitled "The Economic Effects of the 2017 Tax Revision: Preliminary Observations."
Business investment went up, though it wasn't out of line with previous fluctuations, the report said.
Some of the most dramatic effects came with so-called repatriation, with multinationals bringing home $664 billion in 2018, four times as much as was typically seen in previous years. Still, that did not lead to a "surge" in investment, CRS said, with companies using much of the money to buy back their stock.
The agency said estimates of the law's first-year budgetary cost were close, with the price tag coming in at $9 billion more than anticipated. The cuts had been projected to run $163 billion in 2018. Corporate receipts were lower than forecast, while individual income taxes exceeded projections.