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Joint Economic Committee Democrats Chairman - Rep. Don Beyer (D-VA)

Tax Cuts 2.0 Overwhelmingly Benefits the Wealthy

Weekly Economic Snapshot - 9/17 - 9/21

Economic Facts for This Week

  • A new JEC report examines how child poverty costs the nation more than $1 trillion each year in lost wages and productivity, increased health care and child maltreatment costs, and higher crime rates.
  • New Census data reaffirm that federal investments keep millions of Americans out of poverty. Social Security alone kept 27 million Americans out of poverty in 2017.
  • By 2016, 18.5 million Americans gained health insurance coverage largely due to the Affordable Care Act (ACA), with the biggest coverage gains among those below 138 percent of the federal poverty line and Hispanic young adults.
  • Financial crises are harmful to growth and employment. That is why a strong regulatory and supervisory structure able to adapt and innovate in times of stress is necessary to reduce the costs of a crisis on the economy.


Chart of the Week



Republicans unveiled a second round of tax cuts for the wealthy last week. The new law, similar to the Tax Cuts and Jobs Act, heavily skews its benefits to the wealthiest Americans. The top 20 percent of households would see almost two-thirds of the benefits. And the top 5 percent of wealthiest households in the country would see more than 40 percent of the benefits. On top of this, it will add substantially to the debt, costing nearly $600 billion from 2019 to 2028 and about $3 trillion from 2029 to 2038, even with dynamic scoring. Furthermore, according to the Penn Wharton Budget Model, it would also shrink the economy in the long run.


Tracking Trump’s $4k Promise

During the tax cut debate, the White House claimed that the average American household would see an income increase of $4,000 a year because of the tax cuts. Below are some indicators looking at whether or not Republicans are living up to their promise:

  • Stock buybacks are at record highs, with public companies announcing more than $750 billion in stock buybacks so far this year. Goldman Sachs projects buybacks could soar to $1 trillion by the end of 2018.
  • Average weekly wages for production and nonsupervisory workers are just 2 percent higher than they were before the new tax law, before adjusting for inflation.
  • The average hourly wage for production and nonsupervisory workers—our best measure of the median workers’ take home pay—was lower in August 2018 than it was in August 2017, after adjusting for inflation. 



  • A new brief details how high levels of market concentration may lead to stagnant wages, fewer new businesses, and a weakened supply chain.
  • The earnings gap between black and white men actually grew between 2000 and 2017 and remained the same between black women and white men, indicating no progress on closing the racial pay gap. 
  • Despite recent signs of an increasingly robust labor market, this progress is unlikely to offset the decline in labor force participation stemming from an aging population.
  • Members of a bipartisan group that includes Former Federal Reserve Chair Janet Yellen put forth a plan to reduce emissions by 32 percent by 2025 through the implementation of a carbon tax.


Coming This Week

  • Wednesday 8:30am: New Residential Construction (August)

  • Thursday 10:00am: Existing-Home Sales (August)