Friday marks the six-month anniversary of President Trump signing the bill known as the Tax Cuts and Jobs Act, and both Republicans and Democrats marked the day by trying to spin so far.
“In only six months, the economy has been reinvigorated — and the best is yet to come,” House Ways and Means Committee Chairman Kevin Brady, R-Texas, a key architect of the tax law, wrote in the Wall Street Journal.
“Six months after its enactment, none of the promises that Republicans made are coming into fruition,” Democratic Whip Steny Hoyer, D-Md., said at the Capitol.
The economy has improved since December. The unemployment rate has dropped from 4.1 percent to 3.8 percent as employers have added more than 1 million jobs.
But that is not necessarily attributable to the tax law. The economy was improving for a long time before the tax cuts passed.
Here are some data points to consider:
Business investment: The point of cutting the corporate tax rate and allowing businesses to immediately write off new investments was to boost business investment, which drives economic growth.
Business investment rose at a 9.2 percent annual rate in the first quarter, the most since 2014. Take that result with caution, though, as it’s the kind of number that can bounce around from quarter to quarter.
Repatriation: It appears that multinational corporations repatriated about $270 billion in the first quarter, according to the White House Council of Economic Advisers. Allowing the trillions of corporations’ foreign earnings to move freely back into the U.S. was a key motivation for the tax law.
Wages: Despite the drumbeat of bonuses and wage increases touted by Republicans, the promised higher wage growth has not materialized. Average hourly earnings were up 2.7 percent on the year in May, in line with the gains in past months.
Speaking on Fox Business Friday morning, Council of Economic Advisers Chairman Kevin Hassett said that wage growth would come in time. “We’ve got a capital spending boom going on right now that’s going to continue for — really we think — three to five years, and it’s going to lift wages and output, and give us 3 percent GDP just like President Trump promised,” he said.
Stock buybacks: Companies have announced more than $480 billion in corporate buybacks since the tax law passed, according to Senate Democrats.
Democrats compare the buybacks, which disproportionately benefit wealthy individuals, to the bonuses and wage increases attributed to the law, about $7 billion, to argue that it isn’t working. Businesses, however, argue that buybacks augur more investment in the economy.
Popularity: The tax law is unpopular. Only about 36 percent of the public approves of it, while 43 percent disapprove, according to the RealClearPolitics average of polls.
That’s better than when Trump signed the law. Then, fully half of the public didn’t like it. But Republicans were counting on the tax cuts to become more popular as workers saw their paychecks grow.
