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What Did Trump’s Tax Cuts Do?

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Economic upheaval caused by the pandemic has clouded analysts’ ability to understand the effects of the 2017 tax law. Republicans call it a huge success and want to extend it anyway.Seven years ago, when Republicans passed the most significant overhaul of the tax code in a generation, they were sure the law would supercharge investment, raise wages and shift the American economy into a higher gear.So did it?The answer, at least for now, is largely lost to history.A pandemic and a surge in inflation convulsed the global economy not long after the law passed in 2017, scrambling the data that analysts would have typically relied on to draw conclusions about whether the tax cuts helped the economy grow the way Republicans had promised.As a result, policymakers in Washington are now relying on only a partial understanding of the law’s past as they weigh committing roughly $5 trillion toward continuing it.“Basically, from 2020 the data is kind of useless,” said Alan Auerbach, an economics professor at the University of California, Berkeley, who counts Kevin Hassett, a top economic adviser to President-elect Donald J. Trump, among his former students.Economists have focused on just two years before the coronavirus pandemic, 2018 and 2019, to measure the law’s consequences for the most important economy in the world. But that’s a limited window for trying to discern whether the tax cuts prompted a cycle of investment and growth that can take years to play out.“In terms of looking at longer-run effects, pretty much just forget about it,” Mr. Auerbach said. “There’s just no way to control for the effects of Covid.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    The Economy Is Finally Stable. Is That About to Change?

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    President-elect Donald J. Trump’s proposals on tariffs, immigration, taxes and deregulation may have far-reaching and contradictory effects, adding uncertainty to forecasts.After five years of uncertainty and turmoil, the U.S. economy is ending 2024 in arguably its most stable condition since the start of the coronavirus pandemic.Inflation has cooled. Unemployment is low. The Federal Reserve is cutting interest rates. The recession that many forecasters once warned was inevitable hasn’t materialized.Yet the economic outlook for 2025 is as murky as ever, for one major reason: President-elect Donald J. Trump.On the campaign trail and in the weeks since his election, Mr. Trump has proposed sweeping policy changes that could have profound — and complicated — implications for the economy.He has proposed imposing steep new tariffs and deporting potentially millions of undocumented immigrants, which could lead to higher prices, slower growth or both, according to most economic models. At the same time, he has promised policies like tax cuts for individuals and businesses that could lead to faster economic growth but also bigger deficits. And he has pledged to slash regulations, which could lift corporate profits and, possibly, overall productivity. But critics warn that such changes could increase worker injuries, cause environmental damage and make the financial system more prone to crises over the long run.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Can Wall Street Billionaires Deliver on Trump’s Blue-Collar Promise?

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    The president-elect has named wealthy financiers for key economic positions, raising questions about how much they will follow through on promises to help the working class.When Donald J. Trump first ran for the White House in 2016, his closing campaign advertisement lamented the influence of Wall Street in Washington, flashing ominous images of big banks and the billionaire liberal philanthropist George Soros.Now, as president-elect, Mr. Trump has tapped two denizens of Wall Street to run his economic agenda. Scott Bessent, who invested money for Mr. Soros for more than a decade, is his pick for Treasury secretary, and Howard Lutnick, the chief executive of Cantor Fitzgerald, will be nominated to lead the Commerce Department. Mr. Trump’s choices to lead his economic team show the prominence of billionaire investors in setting an agenda that is supposed to fuel a “blue-collar boom” but that skeptics think will mostly benefit the rich.As Mr. Trump prepares to assume the presidency in January, business owners and investors are closely attuned to which of his economic promises he will ultimately follow through on. He has promised to slash tax rates, impose hefty tariffs on China and other countries, and deport millions of immigrants who work in American farms and businesses.The selections of Mr. Bessent and Mr. Lutnick cement a hold by Wall Street executives over the two most important economic posts in any administration. The picks are drawing blowback from Democrats and left-leaning groups, who assailed Mr. Trump for giving top jobs to rich donors and suggested that they would soon be working to create new tax breaks for the rich, not those who are struggling.“For all his talk of looking out for working-class Americans, President-elect Trump’s choice of a billionaire hedge fund manager to lead the Treasury Department shows he just wants to keep a rigged system that only works for big corporations and the very wealthy,” said Tony Carrk, the executive director of the government watchdog group Accountable.US.Yet the decision to tap Mr. Bessent and Mr. Lutnick is raising speculation that Mr. Trump could take a more market-friendly approach to many of his economic policies than some had feared because of his professed love of tariffs, which had the potential for igniting a global trade war.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Tax Proposals Face a Fiscal Reckoning

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    No tax on tips? Lower corporate taxes? No tax on Social Security benefits?The slew of tax cuts President-elect Donald J. Trump proposed in loosely defined slogans over the course of his victorious campaign will now face a fiscal reckoning in Washington. While Republicans are poised to control both chambers of Congress, opening a path for Mr. Trump’s plans, the party is now grappling with how far they can take another round of tax cuts.Mr. Trump’s ambitions for a second term will ultimately have to compete with the signature accomplishment from his first: the giant tax package that Republicans passed and Mr. Trump signed into law in 2017. Large swaths of that tax cut expire at the end of next year, setting up an expensive debate that could overshadow Mr. Trump’s other goals.“Nobody wants to acknowledge at all the sheer enormity of the challenge,” said Liam Donovan, a Republican strategist. “There’s a reckoning coming.”Unlike in 2016, when Mr. Trump’s victory surprised many in Washington, Republicans have spent months preparing for their return to power. They have been discussing using a fast-track budget process that skirts the supermajority requirement for legislation in the Senate, a tactic that would allow for a party-line passage of more tax cuts if Republicans ultimately keep control of the House.But lawmakers and advisers to Mr. Trump are undecided about how much money they can commit to lowering the nation’s taxes again. The cost of just preserving the status quo is steep. The nonpartisan Congressional Budget Office has estimated that continuing all of the expiring provisions would cost roughly $4 trillion over a decade, and Mr. Trump’s campaign proposals could add trillions more to the debt.In interviews before the election, some Republicans said the party would have to show some fiscal discipline.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    California Tribal Casinos May Sue to Curb City Card Rooms

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    In the sprawl of Los Angeles County, a handful of casinos have operated for decades.There’s the crescent-shaped casino in Commerce, an industrial city off Interstate 5. A warehouse-like gambling parlor in Hawaiian Gardens, a short drive south. Two card rooms in Gardena, a nearby suburb.Beyond being places to gamble and unwind, they have two things in common. They generate a large portion of their cities’ revenue. And their existence may soon be challenged in court by California’s tribal nations.After a multimillion-dollar lobbying battle, state legislation signed into law last month allows Native American tribes, which own some of California’s largest and most lucrative casinos, to dispute the legality of certain games played inside these small, privately owned gambling halls.Tribes have argued that such casinos — also known as card rooms because they have only table games and not slot machines — have siphoned millions of dollars away from them.The new law opened a window until April 1 for tribes to take their case to state courts, where they had lacked legal standing. At particular issue is whether the card rooms offer games considered Las Vegas-style gambling, to which the tribes have exclusive rights in California.A group called the California Cardroom Alliance has said the law puts jobs at risk.Recent legislation allows Native American tribes to challenge the legality of certain games played in card rooms.Stella Kalinina for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 125 Shares199 Views

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    Trump Keeps Promising New Tax Cuts. Other Republicans Are Wary.

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    Former President Donald J. Trump’s costly tax agenda undermines the changes he signed into law in 2017. Some Republicans are wary.When former President Donald J. Trump started proposing new tax cuts on the campaign trail, pledging “no taxes on tips” in June, Republicans rallied around his idea. Even Vice President Kamala Harris, his Democratic rival, copied it.Four months and half a dozen proposed tax cuts later, Republican lawmakers and aides on Capitol Hill, as well as some economists in touch with Mr. Trump’s campaign, are taking a more circumspect approach. Asked whether they supported Mr. Trump’s proposals, a typical response was: Let’s see after the election.“I’ll decide what my position is on it once we see what the whole picture is next year,” Senator Michael D. Crapo, an Idaho Republican who could lead the chamber’s tax-writing committee if his party regains control of the Senate, said last month.The caution is a sign that Mr. Trump’s ideas may be too expensive and outlandish for Republicans in Congress to embrace. The rest of the party had been focused on extending the 2017 tax cuts that Mr. Trump signed into law. Some of Mr. Trump’s recent proposals undercut changes that were made as part of that tax package.Even if Mr. Trump and his party control Washington next year, Republicans will be in a far different place on tax policy than they were in 2017. Back then, Republicans on Capitol Hill spent years making plans for a tax overhaul, with a focus on cutting the corporate tax rate and simplifying elements of the code.Once they were in office, they put those plans into motion. Mr. Trump’s general desire to cut taxes fit in with the party’s pre-existing agenda, and conservatives achieved many of their goals with the 2017 Tax Cuts and Jobs Act.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Brags About His Math Skills and Economic Plans. Experts Say Both Are Shaky.

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    In a combative interview, the former president hinted at even higher tariffs as an economic magic bullet.Former President Donald J. Trump has been offering up new tax cuts to nearly every group of voters that he meets in recent weeks, shaking the nerves of budget watchers and fiscal hawks who fear his expensive economic promises will explode the nation’s already bulging national debt.But on Tuesday, Mr. Trump made clear that he was unfazed by such concerns and offered a one-word solution: growth. Despite the doubts of economists from across the political spectrum, Mr. Trump said that he would just juice the economy by the force of his will and scoffed at suggestions that his pledges to abolish taxes on overtime, tips and Social Security benefits could cost as much as $15 trillion.“I was always very good at mathematics,” Mr. Trump told John Micklethwait, the editor in chief of Bloomberg News, in an interview at the Economic Club of Chicago.Faced with repeated questioning about how he could possibly grow the economy enough to pay for those tax cuts, Mr. Trump dismissed criticism of his ideas as misguided. He professed his love of tariffs and insisted that surging output would cover the cost of his plans.“We’re all about growth,” Mr. Trump said, adding that his mix of tax cuts and tariffs would force companies to invest in manufacturing in the United States.The national debt is approaching $36 trillion. The Committee for a Responsible Federal Budget projected last week that Mr. Trump’s economic agenda could cost as much as $15 trillion over a decade. Economists from the Peterson Institute for International Economics, a nonpartisan think tank, estimated last month that if Mr. Trump’s plans were enacted, the gross domestic product could be 9.7 percent lower than current forecasts, shrinking output and dampening consumer demand.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    How Kamala Harris’s Economic Plan Has Been Shaped by Business Leaders

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    The vice president has repeatedly incorporated suggestions from business executives into her economic agenda.When two of Vice President Kamala Harris’s closest advisers arrived in New York last month, they were seeking advice. The Democratic nominee was preparing to give her most far-reaching economic speech, and Tony West, Ms. Harris’s brother-in-law, and Brian Nelson, a longtime confidant, wanted to know how the city’s powerful financiers thought she should approach it.Over two days, the pair held meetings across Wall Street, including at the offices of Lazard, an investment bank, and the elite law firm Paul, Weiss. Among the ideas the attendees pitched was to provide more lucrative tax breaks for companies that allowed their workers to become part owners, according to two people at the meetings. The campaign had already been discussing such an idea with an executive at KKR, the private equity firm.A few days later, Ms. Harris endorsed the idea during her speech in Pittsburgh. “We will reform our tax laws to make it easier for businesses to let workers share in their company’s success,” she said.The line, while just a piece of a much broader speech, was emblematic of Ms. Harris’s approach to economic policy since she took the helm of the Democratic Party in July. As part of a bid to cut into former President Donald J. Trump’s polling lead on the economy, her campaign has carefully courted business leaders, organizing a steady stream of meetings and calls in which corporate executives and donors offer their thoughts on tax policy, financial regulation and other issues.The private feedback has, in sometimes subtle ways, shaped Ms. Harris’s economic agenda over the course of her accelerated campaign. At several points, she has sprinkled language into broader speeches that business executives say reflects their views. And, in at least one instance, Ms. Harris made a specific policy commitment — to pare back a tax increase on capital gains — after extended talks with her corporate allies.This article is based on interviews with more than two dozen campaign officials, policy experts, donors, lobbyists and business leaders.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Plans Could Increase National Debt Twice as Much as Harris’s Proposal

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    A new analysis finds that Vice President Kamala Harris and former President Donald J. Trump’s plans would both add to the deficit, but Mr. Trump’s proposals could create a fiscal hole twice as big.Former President Donald J. Trump’s economic proposals could inflame the nation’s debt burden while ultimately raising costs for a vast majority of Americans, according to a pair of new economic analyses that are among the most in-depth studies to date of the Republican nominee’s plans.The Committee for a Responsible Federal Budget, a nonpartisan group that seeks lower deficits, found that Mr. Trump’s various plans could add as much as $15 trillion to the nation’s debt over a decade. That is nearly twice as much as the economic plans being proposed by Vice President Kamala Harris.And an analysis from the Institute on Taxation and Economic Policy, a liberal think tank, found that Mr. Trump’s tax and tariff plans would, on average, amount to a tax increase for every income group except the top 5 percent of highest-earning Americans.The two new studies differ in some respects. The budget group looked at the cost of both candidates’ tax and spending plans over 10 years, while the tax institute focused on what the impacts of Mr. Trump’s tax and tariff plans would be in 2026. But together they show that Mr. Trump’s agenda could be both costly and regressive by placing a greater burden on those making the least amount of money.Over the course of his campaign, Mr. Trump has floated a flurry of potentially far-reaching policies, including exempting certain forms of pay from taxes and levying broad tariffs on nearly all imports to the United States. He also wants to extend elements of the tax law he enacted in 2017 that are set to expire after next year.“It’s almost difficult to come up with a tax plan that would raise taxes on most Americans, but still increase the deficit by hundreds of billions of dollars a year — and that’s what this does,” said Steve Wamhoff, the federal policy director at I.T.E.P.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More