Part of me kept thinking that it wouldn't really happen, but I guess it did. So now what? I suppose it's time to assess the impact.
I've received numerous requests to break down the tax bill in terms of the exact impact on each affected group, but I don't see the point. The problem isn't in the details, it's in the lack of economic logic governing its overall structure. Precisely where the holes were in the Titanic wasn't nearly as significant as the fact that they were there at all.
Proponents are claiming that the jump in profits for corporations will lead them to hire more workers. While it is quite reasonable to expect profits to be correlated with employment, the reason is that they have a mutual cause, not because the former leads to the latter. That mutual cause, as shown below, is increasing demand or sales.
At this time of year it should be especially easy to see. Why do the stores at the mall hire extra workers every November and December--because profits always rise in October? Of course not, it's because they know sales will rise in the holiday shopping season. It's those sales that lead to the increase in employment AND profits. If we cut firms' taxes without them having any expectation of a rise in their customer business, it simply raises their profits and the sequence of events ends right there.
Want to raise profits and employment? Create a tax plan that increases middle and lower class incomes so they can go to the store and buy stuff. Want to only raise profits? Do what just happened in Washington.
