The economy is firing on all cylinders thanks to the Tax Cuts and Jobs Act (TCJA) signed
by President Trump back in December. If the news was even a fraction this good under President Obama, it would be wall-to-wall coverage on how well the country was doing. For Trump, however, the opposite is true as good news for America is bad news for Democrats so the media narrative must ignore the economy and focus on fake news stories that give CNN and msnbc thrills up the leg.
Writing for MarketWatch, economist Ed Yardeni identifies several points where the Trump economy is booming so well that Democrats and the media (but I repeat myself) want to do everything they can to change the subject:
1. Individual tax receipts still growing after TCJA: The year-over-year growth rate of income taxes in personal income fell to 3.6% during May, down from a recent peak of 7.1% at the end of 2017 (Fig. 3). The ratio of personal income taxes to personal income has been in a flat trend around 12.5% since 2015. It edged down to the bottom of the range in May. In other words, it’s hard to see the tax cut in these data because personal income has been growing, boosting individual income tax receipts even after TCJA-reduced tax rates. I suppose supply-siders can take credit (perhaps prematurely) for this development.
2. Corporate profits jumped after TCJA: Corporate profits also received a big boost from the TCJA. In the GDP accounts, corporate profits taxes plunged from $446 billion during the fourth quarte of 2017 to $332 billion during the first quarter of this year
3. Boom-Bust Barometer near recent record high: The recent weakness in some key commodity prices, such as the price of copper, hasn’t weighed heavily on the CRB raw industrials spot price index. Meanwhile, initial unemployment claims remains at its lowest readings since early December 1969. As a result, my Boom-Bust Barometer (BBB), which is the ratio of the CRB index to jobless claims, remained in record-high territory during the 7/14 week.
4. Forward earnings soaring: The BBB is highly correlated with S&P 500 forward earnings, which soared to yet another record high of $170.21 per share during the July 19 week.
5. FSMI remains bullish: My Fundamental Stock Market Indicator (FSMI) is simply the average of the BBB and the weekly Consumer Comfort Index (Fig.13). It remains at record highs, and has been highly correlated with the S&P 500 since 2000. The FSMI isn’t a leading indicator of the stock market, but it is useful for either confirming or raising some doubt about the direction of stock prices.
Meanwhile, the Washington Examiner reports that the Trump Tax Cuts benefit every single Congressional district:
All 425 congressional districts have benefitted from tax cuts President Trump signed into law in December, with the potential payoff for a family of four reaching $44,697, according to an exhaustive impact report.
The Heritage Foundation analysis added that the payoffs can be pushed higher if the legislation is made permanent.
The state-by-state report and map showed that urban areas, especially around Washington, were among the biggest winners.
“We find that the average household and the average married couple with two kids in every congressional district in every state benefit from the tax cut, both in 2018 and over the next 10 years. Nationally, average households will save $1,400, and married couples with two children will save $2,918 in 2018,” said the backgrounder.
It also said that factoring in other tax cut impacts, “the typical American household will benefit from more than $26,000 in increased take-home pay between 2018 and 2027. The average family of four can expect over $44,000 of increased take-home pay.”
This is a winning issue for Republicans, let the libs like Nancy Pelosi keep calling it “crumbs” and take the position that higher taxes are better.
In fact, go on the offense. Put up better tax cuts and make these permanent across the board. Make Democrats vote that down during this election year so they can explain to constituents why more of their hard earned money belongs in the corrupt halls of Washington, DC.