Tax reform: Instead of raising taxes as Barack Obama did, President Donald Trump cut them. The 2017 Tax Cuts and Jobs Act passed and the GOP Congress restored global competitiveness to the U.S. corporate tax code, years after even European governments cut their marginal rates.
Tax reform encouraged business investment by allowing immediate 100% expensing of capital spending. The result was a capital expenditure surge, with job creation and productivity gains in its wake.
Deregulation: The Trump administration eased restrictions on new energy pipelines, opened new areas to explore, and rationalized emission rules in the energy industry. Gas and oil production boomed. America is now a net exporter of petroleum products, allowing Washington new freedom to advance American interests in the Middle East and elsewhere.
Trump's Plan Worked
A burst of growth followed. From the end of 2017 through September 2018, the economy grew by more than 3%.
Unemployment rate: Many liberal economists had assumed that 4.7% unemployment in November 2016 was as low as it would get. They were wrong. The unemployment rate fell to3.5% by September 2019. More impressive, the rate declined even as the number of people working increased.
- Labor participation among the prime working-age population increased to 83.1% as of January 2020, a rate not seen since 2008.
Wage growth, adjusted for inflation, accelerated after years of stagnation. The improvement was especially pronounced among low-skilled and minority workers left behind by the Obama economy.
- Full-time earnings for black Americans increased 19% in Trump's first three years.
Spreading the wealth: The Obama policy of higher taxes and hyper-regulation skewed economic gains toward highly educated workers in industries such as tech and finance at the expense of other workers; toward asset owners at the expense of labor income; and toward larger companies at the expense of smaller.
These inequalities began to unwind under the Trump Administration. In 2018, the small business optimism index increased in May to the second-highest level in 45 years.
Despite the great impact Trump's tax cuts had on the growing economy, the Biden-Harris campaign has emphasized multiple times that they wanted to repeal them.
Sources: Wall Street Journal, The Hill