‘An Incredible Economic Boom’: The Effects of the 2017 Tax Cuts
Rachel del Guidice: The Daily Signal Podcast is coming to you from the U.S. Treasury Department today, and we’re joined by Monica Crowley, who is the agency’s assistant secretary of public affairs. Monica, thank you so much for being with us today.
Monica Crowley: Such a pleasure, thank you for having me.
del Guidice: We’re coming up on the two-year anniversary of the tax cuts, and given everything that’s happened in these two years, what is your message to the American people about tax reform?
Crowley: That economic freedom works. So, President Trump ran on, and he’s certainly run his presidency on, a platform of economic freedom.
The opposite of socialism isn’t capitalism, it’s freedom, and the president understood this coming in and created an economic policy agenda based on four core pillars. Tax reform being first and foremost, of course, but deregulation, unleashing the energy sector, and realigning international trade, trade reform.
We’re seeing all of these elements coming into play certainly over the last two years, and the results have been astounding, particularly on tax cuts. The TCJA, or Tax cuts and Jobs Act, which was signed by the president into law in December of 2017, has generated an incredible economic boom.
What we have seen is a record number of Americans who are working, we are seeing unemployment at a 50-year low, with certain groups of Americans seeing at or near historic lows for unemployment. African Americans, Hispanic Americans, Asian Americans, and women—all-time lows for those groups.
Let’s talk about wage growth because that is an astounding and direct result of the TCJA. The average American has now experienced 3.1% increase year over year in wage growth. And when we talk about the bottom two quintiles of wage earners, those in essentially traditional blue-collar jobs, they have seen the greatest and fastest wage growth, 3.7% year over year. What we’re witnessing is a true blue-collar boom, but all Americans are benefiting as a direct result of the TCJA.
Rob Bluey: Monica, I’m sure that you’ve heard many stories of people who are benefiting directly as a result of this. Do you have any favorites that you’d like to share with our listeners that … come to mind? People who maybe have had a bonus that they never received before from their employer, have been able to do something with this extra money?
Crowley: Absolutely. Thanks to the TCJA, the average family of four making $75,000 a year has seen a tax cut of over $2,000 on average. That’s real money, despite the fact that the Democrats have tried to talk it down and minimize the effects, that’s real money. For anybody, but certainly for the average wage earner, that is huge.
By the way, it’s their money. So, this tax cut has really empowered the American people [to] keep more of their own hard-earned money, which they are putting back into the economy and providing for their families and their children, their education. It frees them up to start their own business and live their version of the American dream.
You asked about particular stories. We hear all the time from small business owners who have said, “The combination of tax reform and deregulation, getting big government off of our backs, have really allowed us to live our dream and do our business in the way that we originally envisioned, and really haven’t been able to do because of all of these restrictions on us. All these burdens of taxes and regulation.”
So, my heart gets warmed when I hear stories of small business owners who have launched their dream, because that’s what this country is all about. It’s aspirational and it’s about allowing people freedom, economic freedom, to do what they want and provide for themselves and their families in a way that brings them reward and joy.
del Guidice: The Tax Cuts and Jobs Act included a bunch of reforms. Some of them were lowering the corporate rate, full and immediate expensing for businesses. Can you talk about some of the policies included in tax reform, and maybe highlight one that you think has been most beneficial for Americans today?
Crowley: Sure. … The tax package as a whole, the president wanted to make sure that middle-class Americans got most of the benefits of this, and that’s why … in addition to the blue-collar boom, you’re seeing a middle-class boom as well. So, the bulk of the tax reform was targeted to the middle class, which I know as a historian and political scientist, is also incredibly important for stability of any society. So, that in particular is something that I think has generated most of the economic growth.
The left has attacked the TCJA as only benefiting the wealthy, and that in fact is not true. The middle class has benefited and as we have seen, because of the record-low unemployment across the board, that groups that traditionally have not seen economic growth or the benefits of a growing economy—African Americans, Hispanic Americans, women, Asian Americans—that they are almost disproportionately benefiting from this economy because those tax cuts have been in place, and have benefited all Americans.
Bluey: You talk about the success and the benefits to all those Americans, of course, President Trump is somebody who has not been shy in his criticism of the media and their failure to tell the full story about the tax cuts.
Crowley: He’s not shy about much.
Bluey: Right. But on this day as Democrats seem intent on impeachment and doing other things to stymie the agenda, what has it been like to work with him and see his passion for these issues?
Crowley: Well, I am famously one of the very first, if not the first person, to go on national television a couple of days after he came down the escalator and went on national radio, and told the folks who were laughing up a storm about the idea of Donald Trump as a candidate, never mind as president, to stop laughing. Do not underestimate him. And I predicted he was going to pull the whole thing off.
So for me, it’s a source of wonderment for me and incredibly energizing for me to watch him in action and now be part of the Trump revolution, which is really all about economic freedom, protecting the hardworking American taxpayer, protecting the American worker, protecting American businesses so that they’re all free to do what they do best, which is compete, innovate, and succeed.
So for me, it is a great honor and a blessing to be part of this, and every day that I come into the White House campus and enter the Treasury Building and I see the White House there and the American flag, this American patriot, it still gets misty seven months into this job. I still get misty-eyed. It’s such an honor.
Bluey: Monica, you mentioned the Trump revolution, and part of that has been tax reform. However, we’ve seen some of the left say that they would repeal the tax cuts if they were given the chance. How would you say American businesses and even the overall economy would be affected if that actually happened?
Crowley: That would be disastrous for the U.S. economy. For a long time, we have heard from Democrats, the left, [the] president’s opponents talking about how they would roll back taxes and for a long time they’ve been talking in general terms about, “This is the new normal, globalization, stagnant wage growth, if little to any wage growth.” They’ve been talking about how we need to accept all of this because it’s the new normal and there was nothing we could do to reverse it.
President Trump’s economic freedom agenda has put the lie to that, and now people can see it with their own eyes. They’re living this Trump economy on the ground every day, benefiting from it. So when they hear from the president’s opponents that they’re going to roll back all of these things that have made their lives so much richer in every way, I just don’t see that as a political or economic message that would be resonating.
They now understand that what we as conservatives have been talking about for a long time, that when you have these pillars in place that work—tax reform, lower tax burden, tax cuts, deregulation, unleashing the energy sector and trade reform—when you have all of those pillars in place and they are working, that means that you are going to see an economic boom. We’ve been talking about this for a long time.
We’ve been stymied by even presidents who have been Republicans, we’ve been stymied in really effecting this kind of agenda. President Trump has put it into place and it is generating exactly what we always knew it was going to generate, which is a thriving economy that’s benefiting everyone.
Bluey: Let’s talk specifically about one of those other policies that you just mentioned, and that is trade. Of course, big news both on the China front with phase one of the trade deal there, USMCA [the United States-Mexico-Canada Agreement], coming to a vote in congress. What will that mean to Americans? What’s your message to them about these trade deals?
Crowley: So, President Trump, when he was candidate Trump, he really built his campaign on this idea of economic freedom and an important part of that was the idea that if he became president, he was going to negotiate fair trade deals for the American people because he believes in the American worker, he believes in the American dream.
And he said, “For far too long the United States has been taken advantage of by countries like China, European Union, this NAFTA [the North American Free Trade Agreement] deal is horrible and it’s putting our workers at a severe disadvantage, and if I become president, we’re going to be done with all of that.” He meant it.
So when he became president, he really from Day One put his attention to renegotiating these trade deals and trying to make sure that the American worker and American companies were protected.
So, you mentioned USMCA. Let’s deal with that first because that was first on the trade agenda. To have any American president get two foreign countries to agree to anything is quite the achievement.
Mexico and Canada have agreed to this new NAFTA deal, USCMA, which is a complete overhaul and modernization of the NAFTA agreement. It’s got tremendous protections in there for American workers.
Part of the negotiation with the Democrats back and forth too has been over environmental protections. They’re now in this deal as well. This is going to generate an incredible number of jobs and opportunities for the American people. The ITC [International Trade Commission] estimates hundreds of thousands of jobs created as a result of USMCA. So, he has taken NAFTA and brought it into the 21st century in a whole new framework that’s going to serve the United States.
In terms of China, China is probably the sexier deal, which is why everybody is fascinated by it, but USMCA is actually a bigger size deal than China, but going into the future because China has its sights set on economic domination, it is the sexier set of negotiations.
Phase one essentially focuses on intellectual property protection and a number of other things. It’s been a long and hard fought negotiation led by Ambassador [Robert] Lighthizer at USTR [the Office of the United States Trade Representative] and my boss, Treasury Secretary Steven Mnuchin, who are superb negotiators.
The interesting thing to me as someone who worked with President [Richard] Nixon during the last years of his life, is watching the Chinese economy develop over the last 25 years.
So when I worked with President Nixon, who, as we all know, opened the door to China in 1972, I was with him in the early to mid 1990s, and I went with him on his last trip to China in 1993. Nixon is still considered a rock star, but when he was alive, it was like God from heaven had come down when he stepped out of his car in Beijing, and Shanghai, and all these cities.
I remember being in Shanghai and Beijing, a number of other places in China, with him in 1993 and seeing a country that was just beginning to make the decision to develop their economy.
So, I remember being in Shanghai, for example, and seeing a million cranes reaching into the sky in a million different directions, and there was some work being done. They were trying to throw up buildings really fast, but you could see it was just starting.
Well, about two months ago, two and a half months ago, I joined Ambassador Lighthizer and Secretary Mnuchin on their last trip to China as part of the round of trade talks. I remember, we were in Shanghai, I remember opening the drapes in my hotel room and looking across the river in Shanghai where I had seen 25 years ago all of those cranes in the air, and it was just a megalopolis. I don’t know if you guys have been to China recently, but the development is staggering.
You see the river and there’s literally a ship maybe every 100 yards making its way into the South China Sea. And I saw this and I thought, “In the space of one generation, the Chinese have gotten to be an industrial superpower.”
They will never voluntarily give up the theft, and deception, and brute force that they used to get there in the space of one generation. Therefore, you needed a blunt force instrument to get their attention and bring them to the table, and that’s what the president’s tariffs regime has been all about.
We can debate whether tariffs are good or bad as an academic exercise, but the only thing that got the Chinese talking were the tariffs, and the president reserves the right to reimpose tariffs at any given moment should the Chinese not live up to their promises and obligations held in the phase one agreement.
del Guidice: Monica, you had mentioned that the USMCA is going to generate an incredible number of jobs for the American people, and are there any other pieces of this trade deal that you want to highlight for everyday Americans that they might not be aware of as something that will be beneficial to them as this goes through?
Crowley: Sure. There’s one particular part of USMCA, which I don’t think has gotten a lot of love, but I think deserves some attention. So, thank you for giving me the question to highlight it. That’s the automotive sector in the United States.
Under USMCA, the car industry in Detroit and elsewhere in the U.S. will have access to these markets, which will be huge, which really was somewhat stymied by NAFTA. The automotive industry as estimated will generate 100,000 jobs, maybe more, which would be huge for our rust belt. So, thank you for saying that.
I wanted to highlight that, but also beyond the automotive sector, we have farmers [that] will benefit, ranchers [that] will benefit, our fishermen will benefit. American businesses of all sizes will benefit as a result of greater market access and greater worker protections for us here in the United States.
Bluey: Monica, we created The Daily Signal five years ago to tell the stories that were just not getting out to the American people, some of these wins that you’ve highlighted on the interview today, those stories that don’t get the coverage that they probably deserve, rightfully deserve, by the national news media. So, thank you for spending the time talking with us today.
Crowley: Well, it’s my great pleasure. Thank you so much for having me, and Merry Christmas.
Bluey: Merry Christmas.
del Guidice: Thank you, Monica, for joining us on The Daily Signal Podcast.
Crowley: You bet.
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Rob Bluey (@RobertBluey) is editor in chief of and <Rachel del Guidice (@LRacheldG) is a congressional reporter for The Daily Signal, the multimedia news organization of The Heritage Foundation.
Tags: Rob Bluey, Rachel del Guidice, The Daily Signal, An Incredible Economic Boom, The Effects of, 2017 Tax Cuts, Monica Crowley, Treasury Department, assistant secretary of public affairs To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service and "Like" Facebook Page - Thanks!
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