A new study found that the corporate tax cuts signed into law in 2017 by then-President Donald Trump have resulted in increased investment in the U.S. economy, as well as a small pay bump for employees. However, the cuts have not paid for themselves, as conservatives were sure they would, and instead, have annually added $100 billion to the country’s national debt.
The study used a treasure trove of data from corporate task filings to analyze the Tax Cuts and Jobs Act, and its conclusions could inform the dialogue around renewing parts of the law set to expire. The most cost-effective corporate cut, study authors said, allowed companies to immediately deduct investment spending from their income taxes.
“The evidence that taxes matter for investment really is there,” said Harvard economist Gabriel Chodorow-Reich, one of the study’s authors. “And the evidence that corporate tax cuts are expensive also is there. They’re both just features of the data.”
Additionally, researchers from Princeton University, the University of Chicago, Harvard University at the Treasury Department determined that worker wage gains equaled appropriately $750 per employee per year, significantly lower than the assurances of $4,000 to $9,000 per worker.
