Nobel Prize-winning economist Paul Krugman is surprised Republicans are so strongly defending the Trump administration’s whopping 40% cut in the corporate tax rate since it was what he brands a “dismal failure” at boosting the economy, as promised — even before the pandemic.
President Joe Biden seeks to raise corporate taxes from 21% to 28% to recover a portion of the rate corporations were paying when Donald Trump moved into the White House. (They were paying a 35% rate then.)
Trump claimed the tax cut would boost business investment and increase jobs and wages. Instead, many businesses used the tax windfall to buy back their own stock at record rates rather than expand operations. Wage growth was less than expected, and the cut did not pay for itself as Trump promised. Instead, the massive corporate tax break helped drive the nation into record (pre-pandemic) deficits.
Dozens of some of the biggest corporations in America paid no taxes last year — again.
Krugman said he shouldn’t be surprised by Republicans’ revisions of the past, given their “long history of denying plain facts that conflict with their agenda.”
He predicts that next they’ll claim that Biden is “cooking the books” and that Trump “deserves credit” for a strong economy.