Economics

عملية السطو الضريبي الأميركية الكبرى تكمل عامها الأول

Dec 14, 2018 J. Bradford DeLong

بيركلي ــ مَر عام كامل الآن منذ مرر الرئيس الأميركي دونالد ترمب ورفاقه الجمهوريون بالقوة تخفيضهم الضريبي الضخم لصالح الشركات عبر الكونجرس الأميركي. في ذلك الحين، وصف منتقدو "قانون التخفيضات الضريبية والوظائف" على أنه منحة هازئة للمساهمين الأثرياء. لكن عددا كبيرا من الاقتصاديين أعربوا عن دعمهم لهذا القانون.

على سبيل المثال، تنبأت مجموعة بارزة، خدم أغلب أفرادها في إدارات جمهورية سابقة، في مقال نشرته صحيفة وال ستريت جورنال، بأن التخفيضات الضريبة ستعمل على تعزيز الناتج المحلي الإجمالي في الأمد البعيد بنحو 3% إلى 4%، فضلا عن تحقيق "زيادة مصاحبة" بنحو 0.4% في "معدل نمو الناتج المحلي الإجمالي السنوي" على مدار السنوات العشر المقبلة. وفي خطاب مفتوح إلى الكونجرس، أكدت زمرة تتألف من أكثر من 100 خبير اقتصادي أن "المردود على الاقتصاد الكلي المتولد عن التخفيضات الضريبية" ربما يكون" أكثر من كاف للتعويض عن خسارة العائدات الثابتة"، ما يعني ضمنا أن الفاتورة ستكون محايدة في ما يتصل بالعجز بمرور الوقت.

على نحو مماثل، في تعليق كتبه خصيصا لمؤسسة بروجيكت سنديكيت، زعم روبرت جيه. بارو من جامعة هارفارد أن التخفيضات الضريبية من شأنها أن تزيد من نصيب الفرد في الناتج المحلي الإجمالي الحقيقي (المعدل تبعا للتضخم) في الأمد البعيد بنحو 7%. وأيد مايكل جيه. بوسكين من مؤسسة هوفر هذا التحليل في تعليق لاحق.

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J. Bradford DeLong

Writing for PS since 2002
249 Commentaries

J. Bradford DeLong, Professor of Economics at the University of California, Berkeley, is a research associate at the National Bureau of Economic Research and the author of Slouching Towards Utopia: An Economic History of the Twentieth Century (Basic Books, 2022). He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

How US Corporate-Tax Reform Will Boost Growth
Chip Somodevilla/Getty Images

Longer Reads 25
How US Corporate-Tax Reform Will Boost Growth
Robert J. Barro
In the United States, congressional Republicans are finalizing a tax-reform package that will reshape the business environment by lowering the corporate-tax rate and overhaul deductions.

But will the tax package provide the boost to investment and growth that its backers promise?
predicts that the Republicans’ final tax package will provide a substantial economic stimulus over ten years.
Another Look at Tax Reform and Economic Growth
Chip Somodevilla/Getty Images

6

Another Look at Tax Reform and Economic Growth

Michael J. Boskin argues that the GOP plan, while far from ideal, will have a significant positive effect on investment.

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0 Comments on this paragraph, 47 Comments on this article

David Littlefield Dec 31, 2018

Macro 101 is an amazingly good tool for thinking some things through.
If we give corporations more $$$ through a tax break they will use those $$$ to seek the highest return....new plant, debt retirement....etc.

Since they also do basic math they will look at stock buybacks. Guess what. The highest mathematical use of the new cash is often a stock buyback!

Does that increase employment? No. And the logic goes on from there.

And the top 1%? Are they going to increase consumption...?

No, because they already save XXX% of their income. That number only goes higher.

Ahh well.... so much for the growth idea, welcome to the new aristocracy.
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B Wilds Dec 20, 2018

The structural issues that haunt America's competitiveness far outweigh the benefits of lower taxes. The ugly truth is American companies have little reason to bring jobs home, the logic that lowering corporate income tax will create a massive flow of jobs to our shore is flawed.

Hidden within the tax bill are some provisions aimed at past violations of US tax laws that can lead to both civil fines and criminal prosecution for the corporate managers and their legal counsel who designed some of the schemes companies have used in the past. This could prove very important. More on why jobs may not come back in the article below.

http://brucewilds.blogspot.com/2018/05/us-companies-have-little-reason-to.html
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J. Bradford DeLong Dec 18, 2018

We have corrected this: originally—because of an editing error—the phrase "That implies an increase in annual investment of roughly $800 billion" referred to an increase in GDP rather than in investment.

Brad DeLong
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Douglas Leyendecker Dec 17, 2018

It is naive to think that capital investment is going to increase significantly the day after there is more incentive to do so. Giant corporations don't turn on a dime.
- J. Bradford DeLong Dec 18, 2018
  
  Except that it is now fifteen months since the tax cut seemed likely, no? If the investment increase were not to have kicked in now, when will it hit?
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David Goldstein Dec 16, 2018

Learnt something? I am surprised the same economists have not signed on to the new capital gains tax cut that the republicans now want. They may even claim that this new tax cut will solve any problems caused by the first one. The idea is to get the tax cut for their rich friends, the consequences for the country do not matter.
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eric zepp Dec 16, 2018

Taxes were cut, tax revenues are up. Pretty much predictable. Now, one would think that would tell someone something. But don't hold you breath. Regardless, its not the government's money.
- J. Bradford DeLong Dec 18, 2018
  
  Ummm... No. Corporate tax revenues are down. Try to inform yourself...
  - eric zepp Dec 18, 2018
    
    Please re-read my comment. I didn't differentiate the source. My facts are correct.
    - eric zepp Dec 18, 2018
      
      Please re-read my comment. I didn't differentiate the source. My facts are correct. Besides, its still NOT the government's money.
      - J. Bradford DeLong Dec 18, 2018
        
        Would you accept a friendly amendment? That your fact is correct but misleading? The tax revenues that are up are up because of more workers and better technology. The tax revenues that were supposed to be up because of higher investment—the corporate tax revenues—are down.
        
        eric zepp Dec 18, 2018
        
        The additional taxes coming from more workers and better technology were caused by investments by businesses, investments that derive from a companies net income. Growth derives only when this net income exceeds existing costs.
        
        If you cut corporate taxes to zero, the money just doesn't disappear into Scrooge McDuck's vault. It inevitably bubbles up somewhere else, and is taxed at that point, becoming with the exception of any amount temporarily retained by the firms, income to workers, income to vendors, or income to owners.
        
        To me the more important question we should be asking ourselves is why hasn't more of the money been spent on increasing production and growing business, and what can we do to further incentivize that
        
        J. Bradford DeLong Dec 23, 2018
        
        Ummmm... As best as we can tell at this point, less than 1/10 of the money that Republican economists, the Trump administration, and the congressional majorities had predicted would be spent on boosting investment has been spent on boosting investment. Instead, it has gone into the pockets of the world's upper class—2/3 to American residents, 1/3 to residents abroad.
        
        That's bad for the country, but I can console myself with the idea that it's good for my particular family.
        
        Why and how do you console yourself with this extraordinary misfire?
        
        Brad DeLong
        
        eric zepp Dec 24, 2018
        
        Thanks for asking, but as it was the owners' money to begin with, not mine, and not the government's I don't really need to console myself at all.
        
        If the problem we're solving for is growing the economy while providing necessary government services, isn't it wiser to incentivize owners to reinvest in the firms, while cutting government spending and regulation significantly?
        
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Mirek Fatyga Dec 16, 2018

the tone of the discussion around things like tax cuts, or the role of the government in the economy, is a good reflection of an increasingly infantile state of the American Republic and the American Public that comprises the American Republic.

Taxes can be too high, and they can also be too low. The intervention of the state in the markets can be excessive, but it can also be insufficient.

Fanaticism is what we have to fear, and at the same time resist and fight. If we do not marginalize fanatics, they will first marginalize us, and then lead the world into a catastrophe, as fanatics have always done.
- Kerry Pechter Dec 17, 2018
  
  Well said.
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Carlos Foxtrot Dec 16, 2018

Interesting read.
got a request for 2 clarifications:
1. Which series do you use to make the investment figure. "Investment" is a bit vague and I'd like to dig down into the numbers.
2. From the line "But proponents of the bill nonetheless claimed that we would see enough additional investment to boost growth by 0.4% per year." could I get a citation for some proponents, please? Are we talking economists or just politicians/pundits?
Thanks in advance!
- J. Bradford DeLong Dec 18, 2018
  
  Look at: https://fred.stlouisfed.org/graph/?graph_id=516170&rn=885
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Shultz Lu Dec 15, 2018

There is a typo: It should be $80 billion, not $800 billion.

"...additional investment to boost growth by 0.4% per year. That implies an annual GDP increase of roughly $800 billion, which would require annual investment to rise from 17.5% to about 21.5% of GDP."
- J. Bradford DeLong Dec 18, 2018
  
  You are correct: Thanks. We have fixed it...
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Marc Laventurier Dec 15, 2018

Add to the list another deplorable of an even lower order, a co-author with Kudlow, Brian Domitrovic. Harvard PhD (2000), making history as Assoc. Prof at Sam Houston State University (queue the celebratory, nay, Dionysiac Yosemite Sam gunshot sound effects). In a 12/18 contribution, "George H. W. Bush's Voodoo Rhetoric", he neglects to point out that Reagan doubled the national debt, but then Grenada ("never forget") was worth it. See - https://www.forbes.com/sites/briandomitrovic/2018/12/02/george-h-w-bushs-voodoo-rhetoric/#2ff25121798a
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Aaron Gurwitz Dec 15, 2018

Once: Arthur Laffer circa 1982. Twice: Alan Greenspan circa 2001.
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J Walter Dec 14, 2018

Mr. De-"Long Discredited" has been a purely political phony since his credibility was torn apart in the mid-90s. It is interesting to read him here calling out supposed "charlatans" when indeed he may be the greatest of them all. The chart he includes in his article clearly shows a turnaround in the share of investment coinciding with the election of our current president - a turnaround precisely consistent with the "rapid increase in investment" he claims never materialized. As for his talking points about the larger picture, Mr. Delong notes that predictions made "were primarily long-run," and seems to immediately forget this point when he reaches the premature conclusion that any positive predictions have been proven wrong. In fact, the proponents of the tax bill have been largely correct in their assessments of the immediate impact of the tax bill on GDP among other things - a fact that cannot be said about the "neutral" Tax Policy Center. Mr. Delong has repeatedly strayed from the "pursuit of truth" he claims to endorse; he will continue to spew these lies to the detriment of his character and the profession as a whole. Thankfully, the reasonable among us learned long ago to, as he suggests, ignore him.
- J. Bradford DeLong Dec 18, 2018
  
  The turnaround in the trend of the investment share happened in the summer of 2016—back when Hillary was still generally thought highly likely to win.
  And the increase since Trump's inauguration in annual investment relative to a constant-share baseline is not the claimed $800 billion but rather 1/8 of that.
  
  So I really do not understand what you think you are doing, or who you are working for...
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- james elkin Dec 17, 2018
  
  So the wonderful world of tax cuts have been long proven to advance the country as a whole? Examples, please. On another note. The reinvestment of those copious tax advantages was going to not buy back shares of their given company. "They better not" I believe was the phrase the President used. Is that in fact what has been happening? I am skeptical.
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Mark Cancellieri Dec 14, 2018

As an economist, you should know better. The predicted impact of any tax cut is ceteris paribus.

There is quite a bit of research on the negative impact of taxes on economic growth.

Taxes and Economic Growth
https://docs.google.com/document/d/13NKDPSTMEmC6zjrOqYzN2zwr7ME8HBqAFUHdlBnTC48/edit?usp=sharing
- J. Bradford DeLong Dec 15, 2018
  
  Huh?
  
  So are you really saying that if not for the tax cut investment in America in 2018 would have _fallen_by $800 billion relative to what it was in 2017? By what mechanism do you think that would have happened?
  
  Or have you just not thought it through?
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J. Bradford DeLong Dec 14, 2018

A correction—I missed this in editing. It is not quite true that Greg Mankiw "claimed that the productivity gains stemming from the tax package would primarily boost wages" <https://gregmankiw.blogspot.com/2017/10/an-exercise-for-my-readers.html>. Rather, he claimed that the "relevant exercise... [was] an open economy... [in which] he capital stock adjusts so that the after-tax marginal product of capital equals the exogenously given world interest rate r" and thus that the productivity gains stemming from the tax package would primarily boost wages. The distinction between "cl and "relevant exercise shows" is there, and is what it is. I regret my error.

Brad DeLong
- Yo Mama Dec 16, 2018
  
  How do/did economists factor in the effects of ‘trade war’ tariffs in their tax cut plan? Or was this a knee-jerk reaction by the Administration to force US companies to invest at home?
  - J. Bradford DeLong Dec 18, 2018
    
    The "trade war" has not been really launched yet—except for the unfortunate soybean and other farmers whom Trump has put in the crosshairs. It hasn't yet had an impact on the economy in the large for us to see in the aggregate statistics.
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