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STRIKE TWO: HOUSEHOLD INCOME
The Claim
Household incomes will increase between $4,000 to $9,000 a year, or maybe even more. This will happen because, thanks to the corporate tax cut, the money corporations will save will “trickle-down” to the American worker.
Donald Trump on October 11, 2017 at a speech in Harrisburg, Pennsylvania (but he also said it a zillion times elsewhere): Speaking to hundreds of truck drivers, he said that the average American family would get “a $4,000 pay raise.” He also said that his wealthy friends told him they don’t want anything from the tax bill, and that he should just “give it to the middle class.”
2018 Economic Report from the President: “The corporate tax changes alone are expected to increase annual income for families by an average of $4,000.”
The Truth
According to the U.S. Joint Economic Committee (JEC), “Annual household income growth in the first year the tax cuts took effect lagged far behind the previous three years. It grew only $550 in 2018, compared to $850 in 2017, $1,900 in 2016 and $2,900 in 2015. The growth curve of real median income became flatter.”
The Wall Street Journal reported it this way (remember, the tax cuts went into effect on January 1, 2018): “American incomes remained essentially flat in 2018 after three straight years of growth…in recent weeks, the government has revised downward its estimates for job gains, economic output and corporate profits at various points in time since early last year.”