As President Trump and Republicans go full throttle to ram a partisan tax bill through Congress this week, let’s step back and ask a basic question: What does the U.S. economy need most today? The answer isn’t tax cuts – it’s public investment in modern infrastructure.
Having wasted most of 2017 trying to kill ObamaCare, however, Trump and his party have accomplished next to nothing and are desperate for a political “win.” Their budget-busting tax plan is designed to solve Republicans’ political problems, not the country’s economic problems.
From an economic perspective, the Republicans are fighting the wrong war in the wrong place at the wrong time. Tax cuts may make sense when the economy is slowing down and needs a jolt. But with healthy business profits, a surging stock market and tight labor markets pushing up wages, there’s little need now for a dose of fiscal stimulus.
In fact, average working families finally are beginning to reap the gains of the long economic expansion that started under President Obama. Blue collar wages have soared in the last two years, growing even faster than those for professionals and managers. Despite all the populist angst about a “rigged economy,” stronger growth is narrowing economic inequality.