Reprinted from The New York Times OpEd by Paul Krugman on January 1, 2019.
“The 2017 tax cut has received pretty bad press, and rightly so,” writes Paul Krugman in The New York Times. “Its proponents made big promises about soaring investment and wages, and also assured everyone that it would pay for itself; none of that has happened.
“Yet coverage actually hasn’t been negative enough. The story you mostly read runs something like this: The tax cut has caused corporations to bring some money home, but they’ve used it for stock buybacks rather than to raise wages, and the boost to growth has been modest. That doesn’t sound great, but it’s still better than the reality: No money has, in fact, been brought home, and the tax cut has probably reduced national income. Indeed, at least 90 percent of Americans will end up poorer thanks to that cut.
“Let me explain each point in turn.
“First, when people say that US corporations have ‘brought money home’ they’re referring to dividends overseas subsidiaries have paid to their parent corporations. These did …