By BRUCE THOMPSON
This column first appeared in the Washington Examiner:
In 2017, Congress reduced the corporate tax rate to 21%, lowering the highest rate in the industrialized world and putting American businesses on a more level playing field with their global competitors.
In the next two years, after the tax cuts went into effect, the U.S. economy boomed, with increased capital investment, more jobs, and more income growth. Working people benefited tremendously after the tax cut with record-breaking wage increases, lower unemployment rates, and falling poverty levels. The corporate rate reductions worked to boost wages, create jobs, and lift people out of poverty, helping people who needed it the most.
But now, President Joe Biden wants to raise the corporate tax rate, forcing companies to pay the highest tax rate in the industrialized world once again. Why would anyone want to repeal these tax cuts after all the good they did, especially when the economy is just beginning to recover from the pandemic?
Let’s review how the 2017 tax cuts benefited working people. In 2018-2019, real wages grew 4.9%, the fastest two-year growth rate in real wages in 20 years. Real median wages increased $4,400 in 2019, the largest one-year increase in U.S. history. Incomes for black (7.9%), Hispanic (7.1%), and Asian Americans (10.6%) saw record increases. Median household income reached $68,703 in 2019, an increase of 6.8% over 2018.
In the next two years, after the tax cuts went into effect, the U.S. economy boomed, with increased capital investment, more jobs, and more income growth. Working people benefited tremendously after the tax cut with record-breaking wage increases, lower unemployment rates, and falling poverty levels. The corporate rate reductions worked to boost wages, create jobs, and lift people out of poverty, helping people who needed it the most.
But now, President Joe Biden wants to raise the corporate tax rate, forcing companies to pay the highest tax rate in the industrialized world once again. Why would anyone want to repeal these tax cuts after all the good they did, especially when the economy is just beginning to recover from the pandemic?
Let’s review how the 2017 tax cuts benefited working people. In 2018-2019, real wages grew 4.9%, the fastest two-year growth rate in real wages in 20 years. Real median wages increased $4,400 in 2019, the largest one-year increase in U.S. history. Incomes for black (7.9%), Hispanic (7.1%), and Asian Americans (10.6%) saw record increases. Median household income reached $68,703 in 2019, an increase of 6.8% over 2018.
The unemployment rate fell to 3.5% by the end of 2019, the lowest level in 50 years. The unemployment rate for black Americans dropped to 5.4%, the lowest level on record. The unemployment rate for Hispanic Americans fell to 3.9%, also the lowest level on record.
From 2017 to 2019, 6.6 million people were lifted out of poverty. The poverty rate fell to 10.5% in 2019, the lowest level in U.S. history. Poverty rates for black, Hispanic, and Asian Americans fell to all-time low levels. Nearly 3 million children were lifted out of poverty between 2016 and 2019, reducing the child poverty rate to a 50-year low.
Income and wealth inequality also fell. The real wealth of the bottom 50% of households rose three times faster than that of the top 1%. Real wages for the bottom 10% grew nearly twice as fast as the top 10%. The corporate tax rate cut boosted the U.S. economy, delivering strong income, job, and wealth gains to all people at every income level. The tax cuts delivered record increases in median income, record low unemployment rates, and record low poverty levels for all Americans.
Biden’s corporate tax increases would reverse these historic gains, resulting in slower growth, fewer jobs, and lower wages. Why would Congress want to put these gains at risk just as the economy begins to recover?
From 2017 to 2019, 6.6 million people were lifted out of poverty. The poverty rate fell to 10.5% in 2019, the lowest level in U.S. history. Poverty rates for black, Hispanic, and Asian Americans fell to all-time low levels. Nearly 3 million children were lifted out of poverty between 2016 and 2019, reducing the child poverty rate to a 50-year low.
Income and wealth inequality also fell. The real wealth of the bottom 50% of households rose three times faster than that of the top 1%. Real wages for the bottom 10% grew nearly twice as fast as the top 10%. The corporate tax rate cut boosted the U.S. economy, delivering strong income, job, and wealth gains to all people at every income level. The tax cuts delivered record increases in median income, record low unemployment rates, and record low poverty levels for all Americans.
Biden’s corporate tax increases would reverse these historic gains, resulting in slower growth, fewer jobs, and lower wages. Why would Congress want to put these gains at risk just as the economy begins to recover?
