- PROMISE: Working families will quickly get a $4,000 to $9,000 raise.
Median family income grew by just $514 in 2018 after enactment of the tax law—much slower growth than occurred in each of the last three years under President Obama. The increase in the yearly wage growth rate is up just 0.4 percent over the roughly two years since the Trump-GOP tax law was enacted. The yearly wage growth rate under Obama’s last two years accelerated by 0.7 percent.
- PROMISE: Small businesses will receive a big tax cut.
Almost half the benefits of this supposed “small” business tax cut are going to the tiny sliver of businesses with over $1 million in annual income. Less than a quarter is going to firms with income of $200,000 or less.
- PROMISE: The economy will grow by 4, 5, or 6 percent.
Economic growth (GDP) since the tax law was enacted has been in line with the Obama years. Growth hasn’t hit 3 percent under Trump, and growth during the first three quarters of 2019 is averaging 2.4 percent. The Federal Reserve predicts growth of 2.2 percent for the full year.
- PROMISE: Tax cuts will pay for themselves.
The total cost of the tax cuts is estimated at $1.9 trillion, according to the Congressional Budget Office, which will be added to the national debt. Conservatives claimed the law’s lower tax rates would raise a lot more revenue through greater economic activity. But largely due to the tax cuts (especially for corporations), the deficit has exploded, reaching nearly $1 trillion in 2019, up more than 70 percent from the $585 billion during Obama’s last year in office.

Kansas activist Sarah LaFrenz, warning of the disastrous impacts of deep tax cuts on corporations in her state at a Washington, D.C. rally before the 2017 congressional vote on the GOP tax plan. Credit: Sarah Anderson.
- PROMISE: The pace of job growth will quicken.
Monthly job growth has averaged 202,000 in the two years since the tax cuts were enacted. Job growth in the last two years of the Obama Administration averaged 210,000 a month.
- PROMISE: Business investment will boom.
After just one-quarter of modest growth in 2018, capital investment has declined overall since then, falling into negative territory in the second and third quarters of 2019.
Corporations have instead used their tax savings for stock buybacks, which primarily benefit executives and other wealthy shareholders. Corporations bought back a record $800 billion-plus of their own shares in 2018, an increase of more than 50 percent over the $519 billion in stock buybacks in 2017.
Americans aren’t buying these failed promises. Polls show that more voters oppose the Trump-GOP tax cuts than support them.
Congress should go beyond repealing the Republican tax plan and embrace innovative new ideas for fair taxation. A previous Americans for Tax Fairness report, Fair Taxes Now: Revenue Options for A Fair Tax System, presents a menu of 40 progressive tax reform options that could raise about $10 trillion, demand the most from those with the most to give, and steer a better economic course for our country than the failed policy of cutting taxes for the wealthy and corporations.