The reform Trump signed not only included the pro-growth corporate income tax rate cut but also relief for individuals up and down the income scale. This led to a surprising exchange on CNN shortly after enactment. The network’s Jake Tapper asked Vermont’s socialist senator Bernie Sanders, “I understand you’re not a fan of the tax bill. You don’t like the large corporate tax cut, and you are not happy with the tax cuts for the wealthy. But, according to the Tax Policy Center, next year, 91 percent of middle-income Americans will receive a tax cut.
“Isn’t that a good thing?”
“Yes, it is a very good thing,” Sanders was forced to acknowledge.22
It’s hard to argue with the results of Trump’s rookie season in office. The year 2017 was an exceptional one for liberty in the United States, and especially for economic liberty. The largest rate cut in the history of the U.S. corporate income tax, along with tax relief for individuals and families, arrived on top of a yearlong effort to reduce America’s regulatory burden.
January 2018 brought news of a fourth-quarter surge in U.S. business investment. The Wall Street Journal reported, “Just weeks after the federal government adopted the biggest tax overhaul in three decades, the effects are rippling through corner offices and boardrooms, with companies large and small dusting off once-shelved plans, re-evaluating existing projects and exploring new investment in factories and equipment.” The Journal elaborated on the corporate reaction to reform: “Specialty drugmaker Amicus Therapeutics Inc. has decided to spend as much as $200 million on a new production facility in the U.S. instead of Europe. Kimberly-Clark Corp., maker of Kleenex tissues, is spending hundreds of millions of dollars to put new machinery in one of its U.S. factories.…” Fred Smith’s FedEx announced higher wages and new U.S. capital projects.23
At the end of January, the president arrived at the World Economic Forum in Davos, Switzerland. The White House press pool report from that day captured the scene: “A crowd of Davos attendees gathered three and four people deep around the balcony overlooking the wide staircase Trump was expected to ascend, cell phones held aloft. Some kneeled on the white leatherette bench that hugs the glass-topped balcony, craning their heads over the side.
“When Trump entered the room below, the crowd fell silent except for the sound of cameras clicking and the slightly ominous music that came from an overhead projection that’s been broadcast on one wall all week. He wore a long dark coat and his hair shone golden in the stage lighting overhead. As he slowly ascended the stairs, people started to shout questions. ‘Are you going to be treated well,’ asked one man, most likely a reporter.
“ ‘You tell me,’ the president replied.”24
The gathering’s top-shelf selection of global capitalists, European statists, and nonprofit beard strokers was trying to figure out what “America First” would mean for them. It certainly seemed to mean better times ahead for U.S. workers. How have things worked out since then?
Trump’s corporate tax reform was a game changer. Put simply, a better-equipped worker can produce more and therefore demand higher compensation. In February of this year, just before the season of shutdowns, the White House released the president’s annual economic report. The document noted that U.S. labor productivity rose faster after the tax reform than it had during the preceding years of the recovery that began in 2009. The report also made the case that the Trump combination of regulatory relief and tax reform was the key to outperforming foreign competitors. U.S. productivity growth was surging relative to other developed-country competitors, putting America on a path to higher living standards.
The president for his part presented the issue in moral terms: “My Administration’s focus on economic growth comes from a deep appreciation of the power of work to drive the economy and transform lives. The truth is, jobs do not just provide paychecks; they give people meaning, allow them to engage with their communities, and help them reach their true potential.”25
The unemployment rate stood at 3.5 percent, the lowest in fifty years. “Since I came into office, labor force participation is up and wages are growing fastest for historically disadvantaged workers, reversing the trends seen under the previous administration. Under my Administration, and for the first time on record, job openings exceeded people looking for work, with 1 million more open jobs than job seekers at the end of 2019.”26 Trump gets criticized for hyping his achievements, but he has every right to take pride in a historically outstanding pre-Covid job market in the United States. “In 2018 alone, 1.4 million Americans were lifted out of poverty, and the poverty rate fell to its lowest level since 2001. For African Americans and Hispanic Americans, poverty rates are at historic lows, and the poverty rate for single mothers and children is falling much faster than the average. Since I took office, food insecurity has fallen and nearly 7 million people have been lifted off food stamps,” says the president in his economic report.27
Team Trump could also note falling enrollment in welfare programs, more than 4 million jobs created since the enactment of the tax law, and faster economic growth and wage increases than predicted by the Congressional Budget Office. “Contrary to expectations that the expansion would slow as it matured, economic output has accelerated over the past 3 years relative to the preceding 7½ years, with output growth rising from 2.2 to 2.5 percent at a compound annual rate. In the first three quarters of 2019, U.S. economic growth was the highest among the Group of Seven countries,” according to the president’s report.28
Looking back now at the effort to enact tax reform, Trump tells us, “I had a lot of resistance from a lot of people.”29 So was he serious when, as a rookie candidate in 2015, he proposed lowering the corporate income tax rate to 15 percent? Well, now it can be told. He was serious about making
