Joe Biden claimed the conservative Heritage Foundation think tank declared the 2017 GOP tax cut law a failure.
“Even the Heritage Foundation has pointed out that his tax cut did not work,” the former vice president said Tuesday at a town hall in Spartanburg, South Carolina.
The remarks came in response to an audience member’s question about manufacturing jobs and the economy.
Despite Biden’s comments about the $1.5 trillion tax law, which, among other things, slashed the corporate tax rate to 21% and lowered some marginal income tax rates, several Heritage scholars have praise the tax law. That includes Adam Michel, a senior policy analyst and informal adviser to the White House on the tax law, Heritage founder Ed Feulner, and Kevin Dayaratna, a senior statistician and research programmer.
The Heritage Foundation said in a statement that Biden’s statement “couldn’t be farther from the truth.”
“The Tax Cuts and Jobs Act has been one of the strongest and boldest reforms of President Donald Trump’s first term in office,” the statement said.
Michel told the Washington Examiner Wednesday that he wasn’t sure what Biden was referring to, but that the Tax Cuts and Jobs Act of 2017 “did what was intended” in spurring business investment in the United States.
“There was initially a spike in business investment, a spike in new business formations,” Michel said. “The benefits of that one-time change are still materializing.”
The benefits of the tax cuts, however, “have been pretty significantly undermined by the president’s trade war,” Michel said. “Tariffs are taxes like any other. They’re running two side-by-side policy experiments. But we would be in much worse shape had we not had a significant corporate tax cut.”
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Michel added that Democrats’ frequent argument that the tax cut does not provide much benefit to the middle and lower classes is disingenuous. According to a Heritage Foundation model, the lowest-income congressional districts received the largest tax cut as a percent of the taxes they otherwise would have paid. He also noted that average wage growth has been about 3% for 11 months, with lowest wage earners seeing some of the largest gains.
When asked what he was referring to in regards to the Heritage Foundation, Biden told reporters that “early on, they said they talked about whether or not it has stimulated the economy significantly.”
“There was no great argument that it was, it stimulated the economy and generated significant growth relative to the amount of money that was being spent,” Biden said. “And the debt is serious. I think the Heritage Foundation acknowledges that the increase of the debt by two trillion dollars is a serious problem.”
Biden told the Washington Examiner: “The point was, we have to deal with that growth will not be sustained as long as you have this gigantic debt,”
— Simonson reported from South Carolina, Larsen from Washington.
