The immediate numbers, in wake of the Republican tax bill, showed that corporations were not passing on the money they were getting from their hefty cuts. Just one year after the bill was passed, the rich were the only ones "winning," according to Bloomberg News.
As of March 2019, the promise that the GOP tax cut would pay for itself has not proved to be true. Economists said at the time the tax cut was up for a vote, that it would add significantly to the deficit, thus far it has.
"The tax cuts and the 2018 budget agreement cumulatively account for 46 percent of the projected 2019 deficit," wrote the Pacific Standard. But Republicans and President Trump maintained the bill was paying for itself because it is "unleashing revolutionary economic growth." Except, it isn't. According to the Committee for a Responsible Budget, "the Tax Cuts and Jobs Act (TCJA) show that, regardless of the economic model used, the House tax reform bill will add to the national debt while only modestly improving economic growth."
By April 2019, Americans learned the truth about the GOP tax bill and its impact on them. The low refund was a huge awakening for some Americans and an outright shock for those who suddenly owed money.
According to The New Yorker, last week's GDP report from the Commerce Department showed a "sharp slowdown on capital spending by American businesses" in the second quarter. The goal of the GOP's tax bill was for corporations to use the hefty tax cut to create more jobs for Americans. Not only did it not do that, now they're slowing down even further.
The piece noted that in Oct. 2017, the White House Council of Economic Advisers published a paper saying that Trump's tax bill would cut the tax rate so much for corporations that it would trickle down to the average household to the tune of at least $4,000 and could even reach $9,000 for some Americans. The paper didn't exactly explain how it would trickle down from corporations, but the Council knew it would work.
“I would expect capital spending to really take off if the tax bill passes,” the Council's president Kevin Hassett told the Washington Post.
His theory was that "as businesses equipped American workers with the latest machinery and information technology, the workers would become more productive, and their wages would rise." It didn't happen, but the White House still declared victory.
“So that’s a very tremendous increase,” Trump said. “There hasn’t been an increase like that in many, many years—decades. And I think the most important thing, and Larry Kudlow”—the director of the National Economic Council—“just confirmed to me, along with Kevin Hassett, that these numbers are very, very sustainable. This isn’t a one-time shot.”
It's unclear whether the president was openly lying or simply doesn't understand the economy well enough to know how his tax cut was actually being used.
This time last year business growth took a nose-dive and it's kept falling in 2019. Last week's report showed GDP going negative. Barely one and a half years after the Republican tax bill, businesses are cutting back on capital spending. The New Yorker, explained that it spread across all major categories of business investment. The White House didn't predict any of those findings.
Some economists are blaming the entire problem on Boeing, which saw huge production cuts after the 737 Max airplane was crashing due to a software problem. Others claim that the problem is more about businesses uncertainty around Trump's trade wars.
This isn't the final conclusion of the GOP tax bill, but a trend is emerging. Only time will tell on whether the downturn continues and what businesses report is the cause.