"Not what we expected": Trump's tax bill is losing popularity [View all]

[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]

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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.
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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.
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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