Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Follow us:

THIS ISN’T A PAYWALL

Common Dreams will never be locked behind a paywall because we believe our journalism should remain freely available to everyone ― not just those who can afford to pay. By becoming a sustaining monthly donor today, you can help make sure our work remains free for those who aren't able to chip in.

To donate by check, phone, or other method, see our More Ways to Give page.

"Remarkably, this new data have gotten almost no attention from the media."(Photo: @srbija_eu/Twitter)

"Remarkably, this new data has gotten almost no attention from the media."(Photo: @srbija_eu/Twitter)

Doesn't Anyone Care If the Trump Tax Cuts Are Working?

According to new data it is hard to reconcile with the view that lower taxes would lead to a flood of new investment.

The Commerce Department released data on capital goods orders for January yesterday. As I noted, this is a hugely important early measure of the success of the Trump tax cuts. The ostensible rationale for the big cut in the corporate tax rate that was at the center of the tax cut is that it will lead to a flood of new investment.

Since the outlines of the tax cut had been known since September, businesses had plenty of time to plan how they would respond to lower tax rates. If lower rates really produce a flood of investment we should at least begin to see some sign in new orders once the tax cut was certain to pass.

The January report showed orders actually fell modestly for the second consecutive month. The drop occurs both including and excluding volatile aircraft orders. While this is far from conclusive, it is hard to reconcile with the view that lower taxes would lead to a flood of new investment.

Remarkably, this new data has gotten almost no attention from the media. Both the NYT and the Washington Post ran an AP story that just noted the drop in passing. Doesn't anyone care if the tax cut works?

This work is licensed under a Creative Commons Attribution 4.0 International License
Dean Baker

Dean Baker

Dean Baker is the co-founder and the senior economist of the Center for Economic and Policy Research (CEPR). He is the author of several books, including "Getting Back to Full Employment: A Better bargain for Working People,"  "The End of Loser Liberalism: Making Markets Progressive,"  "The United States Since 1980," "Social Security: The Phony Crisis" (with Mark Weisbrot), and "The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer." He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues.

Comments

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

To donate by check, phone, or other method, see our More Ways to Give page.

Latest News

See all
Intel CEO Pat Gelsinger and others testify at a Senate hearing

Sanders Blasts 'Rigged Economy' as Chipmakers Cut Investments After Big Handout

"Intel announced it will be cutting back on plans to increase jobs by $4 billion while increasing dividends for its wealthy shareholders," the Vermont senator wrote on Twitter.

Jake Johnson ·

Thousands of workers marched from Argentina's presidential office to its congressional building in Buenos Aires on August 17, 2022 to demand government action to address the ongoing cost of living crisis.

Argentine Unions Lead Mass Demonstrations for Higher Wages, Lower Prices

"We can't continue with this level of inflation where every day we keep losing parts of our salary," said one labor leader.

Kenny Stancil ·

Israeli forces raided the office of a Palestinian rights group

Outrage as Israeli Forces Raid, Shutter Offices of Top Palestinian Rights Groups

"Israel continues to persecute Palestinian human rights and civil society groups with the clear aim of silencing any criticism against it."

Jake Johnson ·

Fed chair Jerome Powell walks to a press conference

Economists Fear Fed Minutes Show Central Bank Bent on 'Unleashing Mass Unemployment'

Continued interest rate hikes "risk a recession throwing millions out of work," a pair of experts warned.

Jake Johnson ·

Pence and Pelosi on January 6, 2021

Watchdog: Secret Service Didn't Notify Capitol Police of Threat to Pelosi Until After Jan. 6 Attack

"This is deeply disturbing and requires a full investigation," said one legal expert.

Jessica Corbett ·

Common Dreams Logo

To donate by check, phone, or other method, see our More Ways to Give page.