Distribution Of Benefits And Costs
The distribution of impact from the final version of the Act by individual income group varies significantly based on the assumptions involved and point in time measured. In general, businesses and upper income groups will mostly benefit regardless, while lower income groups will see the initial benefits fade over time or be adversely impacted. CBO reported on December 21, 2017, that: “Overall, the combined effect of the change in net federal revenue and spending is to decrease deficits allocated to lower-income tax filing units and to increase deficits allocated to higher-income tax filing units.”
- During 2019, income groups earning under $20,000 would contribute to deficit reduction , mainly by receiving fewer subsidies due to the repeal of the individual mandate of the Affordable Care Act. Other groups would contribute to deficit increases , mainly due to tax cuts.
- During 2021, 2023, and 2025, income groups earning under $40,000 would contribute to deficit reduction, while income groups above $40,000 would contribute to deficit increases.
- During 2027, income groups earning under $75,000 would contribute to deficit reduction, while income groups above $75,000 would contribute to deficit increases.
The TPC also estimated the amount of the tax cut each group would receive, measured in 2017 dollars:
Infrastructure Inflation And Energy
Within days of taking office, Trump signed presidential memoranda to revive both the Keystone XL and Dakota Access oil pipelines although Trump touted the projects as job-creating measures, the proposed projects were projected to have only a tiny impact on the U.S. economy.
Us 2020 Election: The Economy Under Trump In Six Charts
Claim: President Trump says he built the greatest ever US economy prior to the coronavirus outbreak and that now it’s recovering faster than ever.
Reality Check verdict: It’s true the economy was doing well prior to the pandemic – continuing a trend which began during the Obama administration – but there have been periods when it was much stronger.
The US economy was then hit by the biggest economic contraction ever recorded as a result of the pandemic. It has since bounced back strongly, but hasn’t regained all its losses.
We’ve looked at the economy in six key charts.
The latest numbers show economic output surged by an annualised 33% in the third quarter of 2020, following a record fall as a consequence of the coronavirus pandemic.
The recovery, although strong, hasn’t yet brought economic activity back to pre-pandemic levels.
Mr Trump has said the recent recovery in growth is “the biggest in the history of our country by almost triple…that’s bigger than any nation”.
Yes, it is the biggest quarterly increase, but by more like double – outdoing the previous peak of 16.7% in the first quarter of 1950.
However, Mr Trump’s comparison with other countries isn’t right. From July to September this year, the economy grew by 7.4% in the US . This is less than Germany, Italy and the eurozone as a whole.
During his first three years in office, President Trump oversaw an annual average growth of 2.5%.
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Tax Cut And Jobs Act Deregulation And National Debt
Even before the virus further exacerbated U.S. income inequality, some experts say Trumps economic policies favored the wealthy — and left the poor and middle class behind.
His Tax Cuts and Jobs Act in December 2017 provided major tax breaks to corporations and wealthy individuals. The policy, among other things, reduced the corporate income tax rate from 35% to 21%.
Frankel called the policy “beyond ironic” for a president “who campaigned in 2016 on being the champion of the working man or working person and campaigned on ‘draining the swamp’ in Washington.”
Shierholz said this policy “absolutely increased inequality” and the “vast majority of the benefits of those tax cuts went to the already very wealthy.”
The economists also noted that the policy came at a time when unemployment was relatively low and the economy in good shape.
“That’s not the time to be giving away trillions of dollars to the wealthy,” Frankel said. “When you have a bad shock like the global financial crisis of 2008-09 or like the coronavirus crisis that we’re still going through — that’s the time to increase government spending and expansionary fiscal policy, but you lose the ability to do that if you gave it away.”
NYU’s Bowmaker noted that some “can make the case that the corporate tax rate was a little bit too high” and would welcome the tax cuts.
Despite his goal, the debt has ballooned under Trump. The total national debt has skyrocketed by more than $7 trillion during Trumps tenure.
Trade War ‘disaster’ With China
Trade policy is where the president wields the most economic power, as Congress has over the years delegated negotiating authority to the presidents office, according to Menzie Chinn, professor of public affairs and economics at the University of Wisconsin, Madison. Chinn documented the trade war saga on his macroeconomic policy blog Econbrowser.
Trump exercised this power almost immediately during his first years in office and even went so far as to use national security as a basis for trade barriers with China — something that no president has done in recent times.
Ultimately, the tit-for-tat trade war that Trump waged with China was lost by the U.S., economists say, and data on trade deficits confirm.
Trumps dramatic trade war upended decades of policy, and kicked off with failed meetings with Chinese leaders in 2017. After the talks disintegrated, Trump initiated the trade war by imposing tariffs on all imported washing machines and solar panels in early 2018. He then announced 25% tariffs on steel imports and 10% tariffs on aluminum. China retaliated with tariffs of up to 25% on more than 100 U.S. products including soybeans and airplanes. The sporadic, retaliatory trade-off battles waged on for years, and dragged other countries that were trying to remain competitive in as well.
By the end of his term, the trade deficit will be larger in absolute terms than it was when he came to office, Chinn told ABC News.
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Trade Volumes Since Tariffs Were Imposed
Since the tariffs were imposed, imports of affected goods have fallen, even before the onset of the COVID-19 pandemic. Some of the biggest drops are the result of decreased trade with China, as affected imports decreased significantly after the tariffs. Reduced trade means fewer options for U.S. consumers and higher prices.
|Tariff and Effective Date|
Note: Steel totals exclude imports from Argentina, Australia, Brazil, South Korea, Canada, and Mexico. Aluminum totals exclude imports from Argentina, Australia, Canada, and Mexico. Beginning in 2022, steel and aluminum imports from the EU and UK will be subject to tariff-rate quotas as well as steel imports from Japan. TRQs will be reflected in the table when 2022 import volumes become available in 2023.
Source: Federal Register notices Tom Lee and Jacqueline Varas, The Total Cost of U.S. Tariffs, American Action Forum, Mar. 24, 2022, data retrieved from USITC DataWeb author calculations.
Trump Claims The Economy Is The Best Everthese 11 Facts Tell A Different Story
There has been a great deal of political and media attention paid to the rate of economic growth under the Trump administration during 2017 and 2018. President Trump has often called the results under his administration unprecedented. His statements are unfounded: while wage growth has been strong, most other measures of economic growth under the current administration are less impressive than they were during the tail end of the previous administration, Barack Obamas second term.
As Election Day nears, weve dug into the last four years, spanning the end and the beginning of two different sets of executive leadership, and now let the facts speak for themselves. By comparing the rate of growth of key economic variables in the last years of the Barack Obama administration to the record thus far in the Trump administration, we present a report card on results under the two presidents.
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Section 301 Chinese Products
The United States is currently imposing a 25 percent tariff on approximately $250 billion of imports from China and a 7.5 percent tariff on approximately $112 billion worth of imports from China.
Under the Trump administration, the United States Trade Representative began an investigation of China in August 2017, which concluded in a March 2018 report that found China was conducting unfair trade practices. The same day, President Trump announced tariffs on up to $60 billion of imports. The administration soon published a list of about $50 billion worth of Chinese products to be subject to a new 25 percent tariff. Stage one of the tariffs began July 6, 2018, on $34 billion worth of Chinese imports, and stage two, the remaining $16 billion, went into effect August 23, 2018. These tariffs amount to a $12.5 billion tax increase.
The Trump administration imposed stage three of Section 301 tariffs in September 201810 percent on $200 billion worth of goods from China. This stage was scheduled to increase to 25 percent beginning in January 2019, but the increase was delayed until it was allowed to go into effect in May 2019. Other tariffs threatened on China under the previous administration include:
Section 301 tariffs on China currently remain in place under the Biden administration and account for $71 billion of the $75 billion in tariff revenues, based on 2018 import values.
Banking And Consumer Protection
President Trump began efforts to loosen regulations imposed on financial institutions under the DoddâFrank Act, which was implemented following the 2007â2008 subprime mortgage crisis. The president also installed budget director Mick Mulvaney to lead the Consumer Financial Protection Bureau established by DoddâFrank. Mr. Mulvaney had been a “staunch opponent” of the Agency’s past history of broad regulations. President Trump tweeted on November 25, 2017, that “Financial institutions have been devastated and unable to properly serve the public” even though commercial banks generated a record level of profit of $157 billion in 2016, lending activity was robust, and bank stocks were in record territory. The Trump administration and others have asserted that excessive financial regulation since 2008 has caused banks, particularly smaller banks, to decline in numbers. However, the FDIC has noted that “Consolidation in the U.S. banking industry is a multidecade trend that reduced the number of federally insured banks from 17,901 in 1984 to 7,357 in 2011” and this trend has continued through 2017.
The Republican-controlled House passed the Financial CHOICE Act, an expansive rollback of the DoddâFrank Act, on June 8, 2017. A less aggressive bill was approved by the Republican-controlled Senate on March 14, 2018. The House approved the Senate measure on May 22, 2018.
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Series: A Closer Look
Examining the News
ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as theyre published.
This story was co-published with The Washington Post.
One of President Donald Trumps lesser known but profoundly damaging legacies will be the explosive rise in the national debt that occurred on his watch. The financial burden that hes inflicted on our government will wreak havoc for decades, saddling our kids and grandkids with debt.
The national debt has risen by almost $7.8 trillion during Trumps time in office. Thats nearly twice as much as what Americans owe on student loans, car loans, credit cards and every other type of debt other than mortgages, combined, according to data from the Federal Reserve Bank of New York. It amounts to about $23,500 in new federal debt for every person in the country.
When Can Americans Expect Stimulus Checks
Senate Majority Leader Mitch McConnell said that Americans can expect a new coronavirus stimulus bill at the beginning of 2021 – but not immediately following the election.
We probably need to do another package, certainly more modest than the $3trillion dollar Nancy Pelosi package, McConnell told Hugh Hewitts radio show.
I think thatll be something well need to do right at the beginning of the year.
McConnells statement contradicts that of President Trumps view on when to expect the next stimulus package – vowing on Friday, October 30, to deliver a tremendous stimulus package immediately after the election.
The stock market has done remarkably well under Trump, a nugget that the president continues to remind people of.
Trump is predicting a V-shaped recovery after the economy shrank at a 32.9% annual rate between April and June due to coronavirus.
A V-shaped recovery means the broader economy will recover quickly, returning to pre-recession levels without large sectors or groups falling behind.
To achieve this the presidents strategy is to rely on tax cuts and business deregulation.
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Section 232 Steel And Aluminum
- In March 2018, President Trump announced the administration would impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum.
If 2018 imports equaled 2017 levels, the tariffs could have cost U.S. firms nearly $9 billion. For example, the value of imported steel totaled just over $29 billion in 2017. If the 25 percent tariff were levied on the same level of imported steel, the tax would total roughly $7.3 billion. Similarly, if a 10 percent tariff were applied to the $16.8 billion worth of aluminum imported in 2017, the tax would total nearly $1.7 billion. Several countries, however, have been excluded from the tariffs.
Tariffs on steel and aluminum and derivative goods currently remain in place for several countries under the Biden administration and account for $3 billion of the $75 billion in tariff revenue, based on 2018 import values.
National Association Of Manufacturers
The National Association of Manufacturers had agreed with Trump’s plan to lower U.S. manufacturing costs, which are significantly higher than in other countries. NAM wanted Trump to further reduce regulations on manufacturing companies, as it pays nearly twice what companies in other industries do. This raises the price of American-made goods.
On the other hand, NAM disagreed with Trump’s protectionism. Other countries raise tariffs in return, which reduced American exports to those countries, even prior to the pandemic. It put a brake on U.S. growth and raised import prices for American consumers.
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Understand Inflation And How It Impacts You
- Inflation 101: Whats driving inflation in the United States? What can slow the rapid price gains? Heres what to know.
- Greedflation: Some experts say that big corporations are supercharging inflation by jacking up prices. We take a closer look at the issue.
- Changing Behaviors: From driving fewer miles to downgrading vacations, Americans are making changes to their spending because of inflation. Heres how five households are coping.
Some huffing and puffing ensued. There was talk in the hallways about Mr. Blinders focus on unemployment rather than on inflation prevention, which central bankers viewed as their main goal. It made its way into the news media, including some scathing attacks.
Put simply, Blinder is soft on inflation, wrote the Newsweek columnist Robert J. Samuelson. Without adequate anti-inflation conviction, Blinder lacks the moral or intellectual qualities needed to lead the Fed.
I was pilloried for suggesting that we might get below 6 percent on the unemployment rate, Mr. Blinder, a Princeton economist, said recently.
A widespread view among economic policy elites, after the runaway inflation in the 1970s and early 1980s, was that elevated unemployment was a necessary cost of keeping prices stable. Also, that the government cant spend much more money than it takes in without crowding out private investment leaving the economy weaker over time and that policymakers should act pre-emptively to ward off these risks.