Paul Krugman: The Trump Tax Cut: Even Worse Than You’ve Heard: "The 2017 tax cut has received pretty bad press, and rightly so. Its proponents made big promises about soaring investment and wages, and also assured everyone that it would pay for itself; none of that has happened. Yet coverage actually hasn’t been negative enough.... The reality: No money has... been brought home... the tax cut has... reduced national income... at least 90 percent of Americans will end up poorer...
...These transactions are simply rearrangements of companies’ books for tax purposes; they don’t necessarily correspond to anything real.... If you want to know whether investable funds are really being transferred to the U.S., you need to look at the overall balance on financial account... basically nothing has happened.... The tax cut did, however, have one important international effect: We’re now paying more money to foreigners.... Roughly a third of U.S. corporate profits basically flow to foreign nationals–which means that a third of the tax cut flowed abroad, rather than staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut probably made America poorer.... And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population.... Meanwhile, since the tax cut isn’t paying for itself, it will eventually have to be paid for some other way.... Even the mainly negative reporting doesn’t convey how bad a deal this whole thing is turning out to be....
#noted
