Quote:
Originally Posted by lustylad
As I've said many times before (usually in reference to Paul Krugman) - I prefer my economists to be empirical rather than polemical. That means keep your fucking politics and partisan biases out of it. Does the empirical evidence suggest it was good policy or bad policy?
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Hilarious!
Quote:
Originally Posted by lustylad
This is an old thread. It has 252 replies and nearly 47k views. I bumped it to note the new NBER study which strengthens the case I made when I started the thread 19 months ago. Why don't you go back and read this thread from start to finish, then look at the 85-page NBER study (link is in post #246 above), and let us know your thoughts?
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OK, admittedly after seeing all the math I took a pass on reading the entire paper. But here are a few observations from a quick look, followed by a little editorializing.
Here's a link to the paper:
https://conference.nber.org/conf_papers/f191672.pdf
Thirty-nine Nobel Prize winners in economics, 14 members of the Presidents' Council of Eonomic Advisors, and three of the four authors of the paper in question are or were members of the nonpartisan National Bureau of Economic Research (NBER). The authors of the paper work at Harvard, Princeton, the University of Chicago and the Treasury Department.
Figure 9 on page 45 is enlightening. The blue line shows the estimated increase in labor taxes as a % of the pre-TCJA corporate tax revenue. By the third year (2020), labor taxes are up by 10% of corporate tax revenue, and by year 10, they're up by 15% of corporate revenue. The increase in labor taxes results from an increase in (a) wages and (b) employment, as a result of the TCJA. The corporate tax changes in the TCJA had a positive effect on employment and wages.
You sum the solid red and blue lines on the graph to come up with the net change in corporate tax revenues. In the initial years, the drop in corporate tax revenues is greater than the increase in labor taxes, so the net effect is lower total tax revenues. After year 4 though, total tax revenues are actually higher than they would have been without the TCJA. Go out to year 20, and the Treasury is collecting 18% more tax revenue, expressed as a % of pre-TCJA corporate tax revenue, than it would have otherwise! There were no losers here, only winners. The companies, the workers and the Treasury all benefit.
Supply side economics prevail again!
This is a good example of how a Republican led change in policy resulted in benefits to the economy years after it was first implemented. The measures passed during the Biden administration, in particular the American Rescue Plan, were more like sugar highs. They boost the economy while the money's being spent, but then the longer term repercussions, like the increase in the national debt, don't justify the short term high. Admittedly there are long term gains to be had from, for example, the bipartisan infrastructure bill. But given all the pork and inefficiency associated with the Federal bill, I believe local and state fixes for most infrastructure shortcomings are a better way of dealing with inadequate and outdated infrastructure.
