Letter to the editor: Looking at economic performance prior to COVID-19
There have been a couple of letters recently attempting to discount the value of the Republican tax cuts which included some comparative data. As is often the case, the devil is in the details. A major point overlooked is that there is a time lag from the time a tax cut is enacted until real growth occurs.
Nicole Kaeding of the Tax Foundation puts it this way: “The law’s design is such that the economic impacts are long-run. It takes several years for the lower cost of capital to impact investment. Firms need time to plan, purchase, and permit new investments before they put the items into service. Much of the acceleration of growth happens several years after the law’s original passage.”
However, let’s look at some of the immediate effects. Due to the lower corporate rate, $1.04 trillion has been repatriated from foreign accounts since 2017 and is now at work in our country. Unemployment went from 4.7% in 2016 to 3.5% in 2019. Between 2015 to 2016, Federal tax revenues only rose from $3.25 to $3.27 trillion, less than 1%. Between 2018 and 2019 revenues went from $3.33 to $3.46, or almost 4%. Quite a change has been underway. Economic projections for 2021 reflect the pre-COVID vibrant economy.
Support Local Journalism
As a Summit Daily News reader, you make our work possible.
Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.
Your donation will be used exclusively to support quality, local journalism.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User