"Not what we expected": Trump's tax bill is losing popularity

[mahatmakanejeeves]

David Fahrenthold Retweeted:

on tax-cut effects so far: “spending on equipment is lower than it was at end of last year, and overall business investment was 6.3% in first quarter, unchanged from 6.3% in final quarter of 2017. There has also been no acceleration in wage growth”

Link to tweet

Wonkblog Analysis

‘Not what we expected’: Trump’s tax bill is losing popularity

By Heather Long June 29 at 12:32 PM [link:[e-mail]|Email the author]

....
It's too early to tell whether the tax cut is working, most economists across the political spectrum say. There has been a clear burst of optimism since the tax cut passed, especially among business owners. But that optimism has yet to translate into a substantial bounce in business spending on new factories, equipment and technology.
....

What's not going well — so far

Critics of the tax bill, which every Democratic senator voted against, counter that the faster growth is likely to be temporary — and that it comes at a high cost. Most forecasters, including the Federal Reserve, anticipate the growth will peak in 2018 and fall back to normal by late 2019. In the meantime, the tax bill will leave the country more than $1 trillion deeper in debt by 2020, according to the Congressional Budget Office.

The success of the tax bill hinges on a surge of corporate capital spending. If that doesn't come through, the Trump Administration is unlikely to get the 3 percent growth it's predicting for years to come. So far, spending on equipment is lower than it was at the end of last year, and overall business investment was 6.3 percent in the first quarter, unchanged from the 6.3 percent in the final quarter of 2017.
....

Heather Long is an economics correspondent. Before joining The Washington Post, she was a senior economics reporter at CNN and a columnist and deputy editor at the Patriot-News in Harrisburg, Pa. She also worked at an investment firm in London. Follow @byHeatherLong

[Wellstone ruled]

1. Many here have stated from the Start,

this is one huge Boat Anchor for our Country and we are sinking into the Abyss.

[soryang]

2. Lowering taxes reduces the incentive for capital expenditures

like this is some great revelation that no one knew.

[RandomAccess]

3. Then WTF was Kudlow yammering about earlier?

He was trying to sell the idea that the tax cut is SO good, that growth is already SO good, that it's reducing the deficit.

It was a pretty energetic performance, too, with hands waving all around, speech and facial expressions all animated.

Theater. That's all. A fictional comedic drama.

[SWBTATTReg]

4. Kudlow is a blowhard...I recall watching him years ago, and I quickly lost interest in ...

what he had to say because he's a one sentence, gotcha guy, and that's it. Full of it. Economy has been running at a fair clip for quite some time now, and it's been some time since the last downturn, 9 yrs or so, after Obama won and got into office.

All this tax cut of 2018 is going to do, is deepen the federal debt (proving that the republicans really weren't interested in paying down the debt, being that they passed this 2018 tax cut law w/o corresponding reductions in federal spending elsewhere to pay for it, like they did on many of Obama's bills to Congress (I recall this, they stalled and everything else they could do (repugs) to not let his legislative attempts go through)).

Steam is running out. Businesses I think have already tapped the markets so much w/ debt, stock buybacks, and the like, and the money from the 2018 tax cut law didn't flow into the hands or pockets of consumers, it went into stock buybacks etc., which simply overinflated the stock market pricing which is going to cause problems down the road. Consumers simply didn't get any money out of the deal (inflation is eating it up, any minor gains), and w/ rump tariffs and market disruptions caused by rump, tendencies are to restrain spending on the part of consumers.

[BigmanPigman]

5. The Dems must use this to defeat the GOP in the midterms.

This is how we win. If the Dem candidates campaign on restoring the ACA, repealing the tax scam and building infrastructure we will get a lot of GOP voters. These issues are proven to be supported by the majority of Americans.