The Republican Tax Cut Had No Effect on Growth

A couple of years ago Robert Barro predicted that the Republican tax bill would increase GDP by 1.1 percent in 2018 and 2019. A reader asks:

I’m curious what the official numbers ended up being and you seemed like a guy who could find out and might care to.

Nothing simpler! Growth clocked in at 2.9 percent and 2.3 percent in those two years. So Barro is right only if he initially projected growth of 1.8 percent and 1.2 percent without the tax cut.

That seems unlikely. My best guess, based on both GDP figures and a few other things is that the Republican tax cut, remarkably enough, had virtually no effect on growth. I’m not sure how they managed that since lower taxes should stimulate growth, but apparently Republicans can even screw up a tax cut these days.

Then again, the best way to make a tax cut effective is to give less of it to the rich and more of it to the middle class. If the real goal here was merely to make the rich a little richer, then it worked great and Republicans didn’t screw up anything.

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THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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