The False Promises in President Trump’s Tax Plan

The president’s claim also defies history. Wages have long stagnated, despite tax cuts in the 1980s and 2000s, while profits, shareholder returns and executive pay have soared. Profits, whether lifted by favorable economic conditions, by tax cuts or by both, have not translated into employee raises and have instead been used for other purposes.

One is to buy back stock, which lifts share prices and, by extension, executive compensation.

.. Following a huge one-off corporate tax cut in 2004, big piles of corporate cash were also used to pay dividends to shareholders, settle legal issues and finance severance packages for layoffs.

.. Of all the ways that corporations have spent their profits recently, business investment has generally been low on the list. Higher wages have been even lower, if they make the list at all.

.. Mr. Trump has proposed cutting the top corporate rate from 35 percent to 15 percent, a point he emphasized on Wednesday despite warnings from his economic advisers that a cut that sizable would cause the deficit to explode.

.. he analysis showed that the proposed Trump tax cuts would lift after-tax income for the

top 1 percent of taxpayers by at least 11.5 percent (or an average annual tax cut of $175,000), compared with a barely perceptible

1.3 percent for taxpayers in the middle (or $760 in average tax savings).

.. The question is how House Republicans will deal with those potential deficits. Many of them have built their reputations as fiscal hawks.