Day 789: Not so shocking: Trump tax cut won’t have claimed effect, White House admits

Growth rate expected to equal that seen under Obama.

Donald Trump and his financial advisers promised that a massive tax cut for corporations and the wealthy would prop up the entire economy in ways that would more than offset the revenue lost by the cuts.

Under Ronald Reagan, this same idea was pitched to Americans and the economy saw no surge as a result of so-called trickle-down economics: it failed.

And just 15 months after Trump’s tax cuts passed, the White House is admitting, too, that trickle-down economics will not work in the way touted by Trump. No, substantially more goosing of the economy — including more monumental tax cuts — is now required to achieve the three percent annual growth promised. (Trump promised as high as five percent annual growth at one point.)

To produce that average growth rate for the next decade, White House forecasters say, the American economy would need additional rollbacks in labor regulations, a $1 trillion infrastructure plan and another round of tax cuts.

But without those additional steps, the president’s economic team predicts in a report released on Tuesday that growth would slow to about 2 percent a year in 2026. That is the year when many of the individual tax cuts included in the 2017 law are set to expire, essentially producing a tax increase for millions of Americans.

What’s the overall result of the tax cuts on the economy? Virtually nothing.

From the time the recession ended in 2010 through his last year in office in 2016, Barack Obama saw growth average over two percent. Trump’s forecasters see long-term growth of — wait for it — about two percent.

789 days in, 673 to go

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