For most of us taxpayers, feeling the impact of President Trump’s signature Tax Reform Act 2017 came quickly, if modestly. The reduction in withholding rates sped a few bucks across all of employed America starting early in the year. Fast food feel-good. How the net-net of all the changes in the tax codes would affect particular Americans – we’re finding out about that now.
But the intended message of the tax act was not sent to us small fry who spend our money as it comes. It was beamed to those who plan their spending; who know in January how things will work out next April. They are the tax act’s intended beneficiaries, the country’s biggest corporations and its richest people who would accrue the lions’ share of a $1.5 trillion in buying power. The message to them was invest your windfall and create jobs.
A recent report from the authoritative National Association of Business Economics (NABE) says that didn’t happen. When it comes to both capital investment and job creation the NABE report concludes, “The Trump administration’s $1.5 trillion cut tax package appeared to have no major impact.”
So, if the bulk of $1.5 trillion hasn’t been invested in projects that bring employment, where has it gone?
And what if $1.5 trillion had been diverted not to the top 1%, but had gone directly into public-benefit projects like roads and bridges, airports and mass transit systems, schools, parks and playgrounds.
No one would have been hurt, since the winners from Trump’s tax act are making it clear they don’t need to spend the extra windfall money and we’d all share better public spaces and public services.
The people employed on public works infrastructure projects who do need to earn the money they need to spend would have sent it right back into the economy.
Jordan E. Goodman is “America’s Money Answers Man” and a nationally-recognized expert on personal finance. He is a regular guest on numerous radio and television call-in shows across the country, answering questions on personal financial topics. He appears frequently on The View, Fox News Network, Fox Business Network, CNN, CNBC and CBS evening news.
For 18 years, Jordan was on the editorial staff of Money magazine, where he served as Wall Street correspondent. While at Money, he reported and wrote on virtually every aspect of personal finance. In addition, he served as weekly financial analyst on NBC News at Sunrise for 9 years and the daily business news commentator on Mutual Broadcasting System’s America in the Morning show for 8 years.
He is the author / co-author of 13 best-selling books on personal finance including Master Your Debt Fast Profits in Hard Times, Everyone’s Money Book, Master Your Money Type. Goodman’s Barron’s Dictionary of Finance and Investment Terms and Barron’s Finance and Investment Handbook was just republished in a 10th Edition.