Tax Cuts and Jobs Act Effects Have Been Good For Workers
In 2017 President Donald Trump signed the Tax Cuts and Jobs Act and after two years of its effects, data is showing that the law has had profound effects for workers, according to The Wall Street Journal.
In the law, cuts for individuals and corporations were highly disputed at first with many claiming that the rate cuts would have little to no effect. The minority predicted that economic growth would surge, and the data proves that prediction was valid.
One of the main effects that the Tax Cuts and Jobs Act intended to promote was increased capital spending. One tax cut reduced the cost of installing new plant and machinery by 10 percent, hoping that capital spending would be simultaneously increased as a result.
Furthermore, it was expected that the increase in capital spending would boost GDP growth. In 2018, both of these points were validated. The contribution of nonresidential fixed investment to real GDP growth rose around 0.8 percent to 1 percent in 2018. Capital spending increased by 4.5 percent in 2018.
The extra money lying around for corporations also boosted wages. In the past year alone, nominal wages for the lowest 10 percent of workers increased by 7 percent. For individuals that do not have a high school diploma, wages increased 9 percent. Lastly, real disposable income has increased $6,000 since the Tax Cuts and Jobs Act was passed at the end of 2017.
Two years after the Tax Cuts and Jobs Act was signed by President Trump the data shows positive effects