The corporate tax cuts did not results in new investment from abroad or wage increases: “While evidence does indicate significant repurchases of shares, either from tax cuts or repatriated revenues, relatively little was directed to paying worker bonuses, which had been announced by some firms.” The report underscores how unbalanced the tax cuts were. (“Statutory rate reductions for individuals were relatively small compared with the corporate rate reduction.”) If the tax cuts were intended to be a middle-class tax-relief plan, it was the least competently drafted bill in history.

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Transfers of headquarters overseas for tax purposes (inversions) had actually slowed before the tax cuts. The tax-cut supporters’ promise to decrease inversions was therefore akin to the rooster claiming credit for the rising sun.

The ramifications from this finding are both economic and political.

On the economic side, the tax cuts did not come close to paying for themselves. (“Data on GDP are not consistent with a large growth effect in 2018, and thus the tax cut is unlikely to provide enough growth to significantly offset revenue losses in 2018”). The growth promised is much less than promised, and huge wage bumps never appeared. To the contrary, “The Department of Labor reports that average weekly wages of production and nonsupervisory workers were $742 in 2017 and $766 in 2018. … The nominal growth rate in wages was 3.2%, but adjusting for the GDP price deflator, real wages increased by 1.2%. This growth is smaller than overall growth in labor compensation and indicates that ordinary workers had very little growth in wage rates.”

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Politically, this should inform the 2020 debate. Republicans have been disguising a massive corporate and high-income tax break as a boon to the middle class and the reason for continued economic good times. Neither is the case. Democrats should hammer home again and again that if we stopped rewarding corporations that do not plow investment back into facilities or wages, there would be more money for middle-class tax breaks and for programs that help the middle class. You’d think Republicans would give up on supply-side economics, which at least in more recent incarnations does not produce benefits for the middle class. But it’s invaluable in appealing to upscale donors and easily scammed Fox News viewers. Until it stops working politically, they have got no incentive to revisit false assumptions.