In a new analysis of the TCJA, published last month in the Journal of Economic Perspectives, Harvard macroeconomist Gabriel Chodorow-Reich charts the real-world impacts of the 2017 law's various corporate tax cuts. His paper, co-written with Princeton's Owen M. Zidar and the University of Chicago's Eric Zwick, demonstrates modest increases in wages and business investments, with some expired provisions proving most cost-effective. However, these gains were hardly large enough to offset the significant hit to tax revenue.
Chodorow-Reich hopes the findings challenge partisan narratives and inspire smarter solutions. He argues that observations like 'tax cuts pay for themselves through higher investment’ do not reflect the real-world data. Furthermore, there's a misconception that raising corporate taxes won't affect corporate policy, which also isn't supported by their findings. Essentially, data contradicts both extremes of the tax debate, pointing toward a more nuanced understanding of tax policy's impact.
[
Collection
]
[
|
...
]