The Erosion of Public Finances under Trump
El Calafate, Argentina / December 30, 2019
During the 2020 election cycle, Donald Trump will claim credit for the positive economic trends during his presidency. Major stock market indicators are up, the unemployment rate has fallen, and job creation numbers are positive. But that is not the full story. Read the New York Times' essay on the 2017 federal tax law (link).
After the bill became law in December 2017, the Trump Administration implemented the law to give large companies preferential treatment and reduce their tax bills. The drop in the tax bills of large companies was larger than what most observers anticipated.
The NY Times predicts the federal government may collect "hundreds of billions of dollars less" over the upcoming decades than anticipated. This will increase the budget deficit.
A more fiscally savvy strategist in the White House would use the positive macroeconomic trends to improve the position of public finances. The Trump Administration should structure the tax code and guide implementation to collect tax revenue that meaningfully reduces the budget deficit.