President Trump signed the Tax Cuts and Jobs Act of 2017 a year ago today. Democrats continue to claim the cuts helped only the rich, despite the subsequent creation of jobs.
Today Gary Cohn, former top economic adviser to President Trump, who had disagreements with Trump over tariffs, writes in the Wall Street Journal that "America is competitive again"–and it's thanks in large part to the tax cuts.
Here's a nugget:
The anniversary of the tax law offers a moment to evaluate its initial impact. First, the top-line numbers. With an annualized economic growth rate of 3.3% during the first three quarters of 2018, the U.S. is on track to hit the highest calendar-year rate of growth in 13 years.
It’s easy to forget, but the prevailing wisdom when Mr. Trump took office was that 3% growth wasn’t possible and we needed to settle for the “new normal” of 2%. An additional 1% in gross domestic product makes an enormous difference in the economic outlook, from employment to wage growth to paying down the deficit.
Equally important, businesses immediately shifted investment back to the U.S. In the first weeks after the TCJA became law, each day seemed to bring another company’s announcement. All told, more than 500 companies have announced wage increases, bonuses, new hiring or enhanced benefits, helping more than six million employees around the country. An EY study released in March found 89% of surveyed executives planned to enhance worker compensation as a result of the tax law.
The employment picture hasn’t looked this good in half a century. The U.S. economy has added 2.1 million jobs this year, and unemployment is down to 3.7%—the lowest level since 1969. Job openings reached a record high in August 2018, and there are more openings than unemployed people looking for work.
As intended and predicted, this increase in job openings and lack of unemployed people forces employers to compete for workers by finally raising wages. Since the tax law passed, wages and salaries have risen by 3.1%, the biggest 12-month jump in a decade. Wages for low-income workers have been growing even faster, by more than 4%.
I urge you to read Cohn's article.