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Ronald H. Gruner

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2017 Tax Cuts and Jobs Act

"[W]e are on the front end of a major business investment boom. And that boom is going to carry economic growth faster, it's going to create more jobs, it's going to create more wages. The deficit is going to be much lower. The [2017 Tax Cuts and Jobs Act] is going to pay for itself inside of a couple of years."

Larry Kudlow, CNBC commentator, December 24, 2017

"Insistence of the magical power of tax cuts is the ultimate zombie lie of U.S. policy discussion...There is nothing, nothing at all, in this history that would make any open-minded person believe that the Trump tax plan will cause dramatically increased growth."

Paul Krugman, The New York Times, October 14, 2017

"The only function of economic forecasting is to make astrology look respectable."

John Kenneth Galbraith, Harvard University, 1988

After decades of debate, economists still disagree on the effect tax cuts have on the economy. This table tracks key economic factors before and after the 2017 Tax Cuts and Jobs Act. How will the Act affect jobs, personal income and our massive national debt? By 2020 the numbers will have answered that question. Who will be right, Princeton-educated Larry Kudlow or Nobel-laureate Paul Krugman?

Statistic (click for details) 2015 2016 2017 2018 2019 2020
1.
Unemployment and Labor Force Participation

The Bureau of Labor Statistics metrics for those actively seeking employment and the percentage of the civilian population employed or seeking employment.

1.1
Unemployment Rate: U-3

The U-3 unemployment rate is the official unemployment rate. It is the percentage of the civilian labor force seeking work.


source:
5.0% 4.7% 4.1%
1.2
Labor Force Participation Rate

The labor force participation rate is The labor force as a percent of the non-institutional civilian population aged 16 to 64 currently employed or seeking employment.


source:
62.7% 62.7% 62.7%
2.
Real Median Household Income

Real median household income is the amount that divides the income distribution, after compensating for inflation, into two equal groups, half having income above that amount, and half having income below that amount.

units:
billions of 2015 dollars

source:
$57,230 $59,039
3.
Household Income Distribution

Average household income, inflation-indexed to the most recent year, and the distribution of household income relative to total household income categorized by income quintile and the top five percent bracket..

units:
thousands of dollars/percent

source:
census.gov (TABLE A-2)
3.1 Lowest Quintile
$12.6 / 3.1% $12.9 / 3.1%
3.2 Second Quintile
$33.0 / 8.2% $34.5 / 8.3%
3.3 Third Quintile
$57.6 / 14.3% $59.1 / 14.2%
3.4 Fourth Quintile
$93.2 / 23.2% $95.2 / 22.9%
3.5 Highest Quintile
$204.9 / 51.1% $213.9 / 51.5%
3.6 Top Five Percent
$355.3 / 22.1% $375.1 / 22.6%
4.
Real GDP

Real gross domestic product (GDP) is the inflation-adjusted monetary value of all a country's finished goods and services produced over a single year. It is composed of four components.

units:
billions of 2015 dollars

source:
bea.gov (Table 1.1.5), bls.gov (CUUR0000SA0)
$18,287 $18,528 $18,931
4.1
Personal consumption expenditures

The primary measure of consumer spending on goods and services in the U.S. economy. It accounts for about two-thirds of domestic final spending, and thus it is the primary engine that drives future economic growth.

units:
billions of 2015 dollars

source:
bea.gov (Table 1.1.5)
$12,495 $12,796 $13,088
4.2
Gross private domestic investment

The measure of physical investment used in computing GDP. This is an important component of GDP because it provides an indicator of the future productive capacity of the economy.

units:
billions of 2015 dollars

source:
bea.gov (Table 1.1.5)
$3,068 $3,064 $3,152
4.3
Net exports of goods and services

The value of a country's total exports minus the value of its total imports for both goods and services. It is used to calculate a country's GDP.

units:
billions of 2015 dollars

source:
bea.gov (Table 1.1.5)
-$520 -$553 -$574
4.4
Government expenditures and investment

The portion GDP that is accounted for by the government sector. Government consumption expenditures consists of spending by government to produce and provide services to the public, such as public school education. Gross investment consists of spending by government for fixed assets that directly benefit the public, such as highway construction, or that assist government agencies in their production activities, such as purchases of military hardware.

units:
billions of 2015 dollars

source:
bea.gov (Table 1.1.5)
$3,245 $3,221 $3,266
5.
Federal Tax Receipts, Outlays and Deficit/Surplus

The federal government's total tax receipts, outlays and resulting budget deficit or surplus.

units:
billions of dollars

source:
treasury.gov (Table FFO-1)
5.1
Receipts

Total federal receipts including personal and corporate income, excise and payroll taxes, fees, interest income and other miscellenesous sources.

units:
billions of dollars

source:
treasury.gov (Table FFO-1)
$3,249 $3,267 $3,315
5.2
Outlays

Total federal outlays including non-defense discretionary expenditures, defense, social programs and interest.

units:
billions of dollars

source:
treasury.gov (Table FFO-1)
$3,688 $3,854 $3,981
5.3
Deficit(-)/Surplus(+)

Total federal receipts minus outlays. When receipts exceed outlays a surplus results, otherwise a deficit.

units:
billions of dollars

source:
treasury.gov (Table FFO-1)
-$439 -$587 -$666
6.
Gross Federal Debt

Gross federal debt is made up of public debt securities and securities issued by government agencies.

units:
billions of dollars

source:
treasury.gov (Table FD-1)
$18,175 $19,598 $20,269
6.1
Debt Held by the Public

Debt held by the public, such as Treasury securities held by investors outside the federal government, including those held by individuals, corporations, the Federal Reserve System and foreign, state and local governments.

units:
billions of dollars

source:
treasury.gov (Table FD-1)
$13,148 $14,202 $14,706
6.2
Debt Held by Federal Agencies and Trusts

Debt held by government accounts such as non-marketable Treasury securities held in accounts administered by the federal government that are owed to other federal agencies such as the Social Security Trust Fund.

units:
billions of dollars

source:
treasury.gov (Table FD-1)
$5,027 $5,396 $5,563
7.
Dow Jones Industrial Average

A popular stock index composed of a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and NASDAQ.

date:
Last trading day of the year

source:
17,425 19,763 24,719
8.
Net Corporate Dividend Payments

The distribution of a portion of a company's earnings, decided by the board of directors, paid to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.

units:
billions of dollars

source:
$1,040 $982 $990
9.
10-Year Treasury Constant Maturity Rate

An index published by the Federal Reserve Board based on the average yield of a range of Treasury securities, all adjusted to the equivalent of a 10-year maturity. Yields on Treasury securities at constant maturity are determined by the U.S. Treasury from the daily yield curve.

date:
Last trading day of the year

source:
2.27% 2.45% 2.40%
10.
2015 Consumer Price Index

An index of the variation in prices paid by typical consumers for retail goods and other items based on year 2015.

source: bls.gov

100.00% 102.04% 104.27%