Trump Tax Cut Report Shows 2019 Worker Bonuses Plunged, Trump Promised Companies ‘Showering’ Workers With Cash
On the same day that Donald Trump awarded the prestigious Presidential Medal of Freedom to economist Arthur Laffer, known as the father of “supply side economics” — the theory that, as Investopedia explains, huge tax cuts for corporations and the wealthy will create an economic boom that will “trickle down” to the middle and working classes — a new report showed that Trump’s own 2017 tax cuts, inspired largely by “supply side” theory, have not delivered the massive worker bonuses that Trump promised.
Trump and congressional Republicans in 2017 passed a massive tax cut bill that, according to the nonpartisan Center on Budget and Policy Priorities, gave most of its tax benefits to corporations and America’s wealthiest individuals.
But Trump promised that ordinary workers would also benefit in the form of huge bonuses from their employers who would find themselves flush with cash after the cuts. Trump in a Twitter post said that big companies and corporation would immediately start “showering their workers with bonuses,” as a result of the tax cuts.
New numbers from the Bureau of Labor Statistics and reported by The Wall Street Journal, however, show that the opposite has been true. In fact, in 2019, worker bonuses have plummeted by a stunning 24 percent — the largest such drop in 14 years.
From the first quarter of 2018, before the tax cuts had taken full effect, to the first quarter of 2019, bonuses dropped from 2.8 percent of all worker compensation to just 2.1 percent, according to a Think Progress summary of the BLS stats.
The dismal outlook on worker bonuses following the Trump tax cuts, however, should not come as surprise. Though Laffer and his “Laffer curve” model were the inspiration for the initial round of “supply-side” tax cuts under President Ronald Reagan in 1981 and 1986 — causing Laffer’s economic theory to assume the name “Reaganomics” — many leading economists consider Laffer’s work to be essentially worthless, as the Economist’s View blog has documented.
Even Reagan’s own budget director, David Stockman, told National Public Radio on Wednesday that he considers Laffer “the greatest Fake Economist to ever come down the pike.”
Washington Governor Jay Inslee said in a Twitter message on Wednesday that Laffer is “the last person who deserves a Medal of Freedom.”
Nonetheless, Trump lavished praise on Laffer in a White House ceremony at which he awarded the medal to the now-78-year-old economist, saying as quoted by The Washington Post, “Few people in history have revolutionized economic theory like Arthur Laffer. A very important thing you did, Art.”
Trump also claimed that he had “studied the Laffer curve for many years.”
