It’s nonsense, of course. Think of the motivation: lots of companies are raising wages at least a bit in the face of tight labor markets; pretending that it’s because of the tax cut is a cheap way to curry favor with an administration that has no hesitation about using regulatory and antitrust decisions to reward friends and punish enemies. It’s basically Carrier all over: make a Trump-friendly splash by declaring that he persuaded you to save jobs, then lay off lots of workers after the cameras have moved on.
.. even if you believe economic analyses that suggest corporate tax cuts are good for wages, it shouldn’t happen right away. Any trickle-down should come about because the tax cuts lead to higher investment, which leads over time to a larger capital stock – and it’s the increase in the capital stock, which may take many years, that leads to the wage rise.
The Fed Isn’t the Tax Cut’s Enemy
Officials are open to the possibility that the tax cut will raise the economy’s potential growth rate, although it isn’t their base case
conventional wisdom is that this is the wrong time for Republicans to cut taxes by $1.4 trillion over the next decade. The fiscal stimulus will overheat the economy and force the Federal Reserve to slow it down by raising interest rates more aggressively.
inflation is still too low, and that completely changes the equation: It suggests overheating is to be welcomed, not resisted.
officials are open to the possibility that the tax cut will raise the economy’s potential growth rate, which means faster growth wouldn’t necessarily lead to more inflation.
.. Ms. Yellen and her likely successor, Fed governor Jerome Powell, aren’t yet the party poopers many supply-side tax cut advocates feared.
.. [Larry Kudlow: ] The real test, he said, is how the Fed reacts if growth tops 3%
.. By 2020 Fed officials expect their benchmark federal-funds rate to reach 3.1%, which would be above the 2.8% they expect to prevail in a fully-employed economy growing normally
.. Ms. Yellen made it clear she didn’t agree with Mr. Trump and Treasury Secretary Steven Mnuchin that the tax cut would pay for itself, and warned it may be “taking what is already a significant [debt] problem and making it worse.”
2017 Was Bad for Facebook. 2018 Will Be Worse.
The tech giant’s carefree years of unregulated, untaxed growth are coming to an end.
Facebook is projected to boost sales by 46 percent and double net income, but make no mistake: It had a terrible year. Despite its financial performance, the social media giant is facing a reckoning in 2018 as regulators close in on several fronts.
The main issue cuts to the core of the company itself: Rather than “building global community,” as founder Mark Zuckerberg sees Facebook’s mission, it is “ripping apart the social fabric.”
Those are the words of Chamath Palihapitiya, the company’s former vice president of user growth. He doesn’t allow his kids to use Facebook because he doesn’t want them to become slaves to “short-term, dopamine-driven feedback loops.”
Palihapitya’s criticism echoes that of Facebook’s first president, Sean Parker: “It literally changes your relationship with society, with each other … God only knows what it’s doing to our children’s brains.”
.. Facebook, like Google, books almost all its non-U.S. revenue in Ireland with its low corporate tax rate — and pays most of it to a tax haven for the use of intellectual property rights. The practice resulted in a 10.1 percent effective tax rate for Facebook in the third quarter of 2017.
.. On Tuesday, Facebook announced that it will start booking revenue from large ad sales in the countries they occur, not Ireland.
Trump’s Top Economist Says Corporate Tax Cuts Will Lift Workers’ Wages
The council’s report concludes that if the corporate rate were cut to 20 percent, the median American household would earn $3,000 to $7,000 more than it otherwise would have. The median household earns just under $60,000 a year.
Mr. Hassett said in a conference call with reporters that those gains could be even larger than the calculations suggested, “because America’s broken corporate tax system creates incentives for firms to hold their profits outside our borders.”Another report issued on Monday from three economists at Boston University used an economic model to predict similarly large income gains from the Republican tax framework, though it warned that the plan would likely widen income inequality. That model assumes that the burden of corporate taxes falls almost entirely on workers... Seth Hanlon, a senior fellow at the Center for American Progress think tank and a former economic adviser to President Barack Obama, said Mr. Hassett had “cherry-picked” studies on the effects of corporate taxation on wages.Jason Furman, a professor at the Harvard Kennedy School and a former Council of Economic Advisers chairman in the Obama administration, called Mr. Hassett’s findings “implausible” and noted they were rooted in studies that had not been published in major academic journals.
“This lies outside the mainstream of economists,” he said.