Trump Claims Tax Cut Before Election Never Mentioned It Again

Summary

In touting Republican revenue enhancement bills, President Donald Trump made several claims that don't add together up.

• The nation's existent gross domestic product grew 4.vi percentage and v.2 pct in the third and quaternary quarters of 2014, respectively. But Trump falsely said that the three.3 percent growth in the third quarter this yr was "the largest increment in many years."
• Trump again wrongly claimed that the tax bills would be the "biggest revenue enhancement cut in the history of our country." There have been larger cuts, both equally a percentage of gross domestic product and in inflation-adjusted dollars.
• The president repeated a dubious merits that "centre-class families" would meet their wages go upward "around $4,000." His economic directorate say that could happen later on eight years if the economy grows at high annual rates. But congressional economical experts don't wait that to happen.
• Trump misleadingly said that U.S. corporate taxes "are 60 percent higher" than the average in the developed world. The statutory rate is that much higher than the OECD average, merely the effective rate that corporations actually pay is in line with the globe average.
• The wars in Transitional islamic state of afghanistan, Iraq and Syria have cost $1.52 trillion, says the Defence force Department. But Trump inflated the figure to "almost $7 trillion."
• The president'south proposed fiscal 2018 budget cuts domestic spending, and still he claimed, "We're going to showtime spending here."
• The nation's job growth of 2 million between October 2016 and October 2017 was less than the growth in each of the previous five years. Even so Trump claimed that the gain since his election was "a lot better … than everyone ever even thought possible."
• Trump said that farmers could take gone to jail under the Obama administration if they "bear on" a "footling puddle" on their land. He was referring to a 2015 environmental rule, but that rule explicitly excludes puddles from regulation.

Analysis

In a speech in St. Charles, Missouri, on Nov. 29, Trump praised congressional GOP efforts to overhaul the nation's individual and corporate income taxes. As the president said, the House has passed its taxation nib, and the president is hoping for a "successful vote in the Senate this week."

But there were some factual inaccuracies in the president's remarks, including several false talking points we've debunked earlier.

Real Gdp Growth

Trump one time over again distorted the contempo history of U.South. economical growth.

Trump: Merely by the way the Commerce Department announced this morning that our GDP — that's the big ane — in the third quarter grew even faster than they reported previously. They fabricated a mistake. They were too low. They had it at iii percent. By the way, three percent — did yous ever recall you lot would hear that in less than a yr? And now it comes in at 3.3 per centum which is the largest increase in many years.

He's correct that the real gross domestic product was revised upward to iii.3 per centum for the third quarter of 2017. (Information technology wasn't "a mistake." It merely reflects more and better data.)

But it isn't "the largest increase in many years." It was larger than that in the third and fourth quarters of 2014, when real GDP increased 4.6 percent and 5.2 percent, respectively. It's also not unheard of for the U.Southward. economy to grow quarterly at 3 pct or more, as Trump said. It happened eight times nether President Obama, as we wrote when Trump made a similar claim in August.

Yet Not the Largest Tax Cut

The estimated toll of the Republican tax plans would not be the "biggest tax cut in the history of our land — bigger than Reagan," as Trump claimed once again. There have been larger cuts equally a percentage of gdp and in inflation-adjusted dollars.

When nosotros previously wrote about this on Nov. iii, the nonpartisan Joint Committee on Taxation estimated that the House version of the Tax Cuts and Jobs Act would cost $1.49 trillion over 10 years. Over the kickoff four years, the boilerplate almanac cost would be $185 billion. That's about 0.nine percent or 1 percent of gross domestic product, depending on what that ends up being in 2018.

That would make the House bill the eighth largest cut since 1918, according to the Committee for a Responsible Federal Upkeep'south analysis of Treasury Department information. The 1981 tax cut enacted at the beginning of the Reagan assistants price two.9 percent of Gdp over four years. That makes it the largest, CRFB says.

In inflation-adjusted dollars, the Business firm GOP plan is also less than 3 other taxation plans. The American Taxpayer Relief Act of 2012 toll an average of $320.6 billion over four years, and taxation reductions in 2010 ($210 billion) and 1981 ($208 billion) were also more than expensive.

That's why Trump was also wrong when he said "for years they take not been able to get tax cuts, many, many years since Reagan." Since 1997, there accept been several major bills cutting taxes that accept been signed into law, according a 2013 Treasury Section report. Two of them, as nosotros merely said, produced larger cuts than those proposed by Trump and congressional Republicans.

More recently, the JCT estimated that an amended version of the House beak would price $i.44 trillion, and the Senate version, at $1.41 trillion, would cost even less. That means those bills wouldn't qualify as the biggest tax cutting, either.

Tax Cutting Touch on on Wages

Trump over again claimed that "middle-class families … will see their incomes go up past an boilerplate of around $4,000." The $4,000 figure comes from 2 reports by the White House Quango of Economical Advisers. But, as we have written twice before, don't take the money to the bank.

In the first report, the CEA cited a number of economical research papers that "suggest" the proposed rate cut would increase average household income from $4,000 to $9,000. But Mihir A. Desai, a professor of finance at Harvard, the author of ane of the economic research papers cited in that report, told theNew York Times that the actual income gain would be $800.

In its 2d report, the CEA said the $4,000 pay heighten would happen after eight years — if corporations increment upper-case letter investment and the nation'southward existent gross domestic product grows at a robust charge per unit of between three percent and 5 percent annually. Existent GDP hasn't increased annually by three percent since 2005 and by 5 percent since 1984, co-ordinate to the Bureau of Economical Analysis, and nonpartisan congressional economic experts say such high rates of growth aren't likely over the next 10 years.

In January, the Congressional Budget Role estimated that "real output will aggrandize at an average rate of 1.9 per centum per twelvemonth" from 2017 to 2027. Using that as a baseline, the Joint Committee on Taxation estimated in a November. 30 study that the Senate taxation plan would increase existent GDP by only 0.eight pct on average from 2017 to 2027 — meaning the annual charge per unit of growth would remain below three percent.

Misleading on Corporate Taxes

Trump demonstrated exactly why we have been warning that his regular talking point that the U.S. has one of the highest statutory corporate revenue enhancement rates in the world — lx per centum higher than other developed countries — tin can be misleading. It's considering it might go out the mistaken impression that U.South. companies pay 60 per centum higher taxes than businesses in other countries. They don't.

"Today, America has one of the least competitive [corporate] tax rates on planet Globe — 60 percentage, think of that, lx percent college than the average in the developed world," Trump said. "So our taxes are 60 percentage higher."

The first role of that claim is authentic, then long as it is placed in context. The U.S. has the highest top statutory corporate taxation rate — 35 percentage, and 39 percent when state taxes are included — among developed countries. That'southward 60 per centum higher than the average statutory rate amid 35 countries, according to the Arrangement for Economic Co-performance and Development.

Only as we have explained earlier, that doesn't hateful U.Southward. companies pay more than in taxes than in other countries. The average constructive taxation rate — what corporations actually pay when tax credits and exemptions are factored in — is more in line with the world average. The average effective corporate tax rate in 2008 was 27.one pct, close to the Gross domestic product weighted boilerplate among other OECD countries, 27.7 percent, co-ordinate to a 2014 Congressional Inquiry Service report.

A Congressional Budget Office report in March found that the U.Due south. ranked third among G20 countries when using an "average corporate tax charge per unit" measure, which is "the total amount of corporate taxes that a company pays as a share of its income." And under an "effective marginal corporate taxation rate," defined equally "a measure out of a corporation'south tax burden on returns from a marginal investment," the U.S. was fourth.

Co-ordinate to the OECD, the revenue from taxes from income, profit and capital letter gains of U.S. corporations in 2016 was ii.two. per centum of Gross domestic product. That'due south lower than the average amongst OECD countries.

And that's why information technology'southward wrong to make the bound, every bit Trump did, that because the U.S. statutory rate is threescore pct higher than our competitors, "our taxes are 60 percent college."

Cost of Wars

Trump overstated the amount the U.Due south. has already spent on the Center East wars and how much money he will spend on domestic issues.

The president said the U.Due south. has spent "almost $seven trillion in the Centre Due east over the last 16 years," claiming with that coin "we could take rebuilt our land 4 times over." But the Section of Defence says the cost "for the wars in Afghanistan, Republic of iraq and Syria" through fiscal twelvemonth 2018 was an estimated $ane.52 trillion.

During the campaign, Trump used a $6 trillion approximate, citing a Reuters commodity most a written report on war costs written by Boston Academy Political Science Professor Neta C. Crawford for the Watson Institute for International Studies at Brown University. But that gauge included coin spent in the United States in response to the 9/xi terrorist attacks, not just money spent on the armed services in the Centre E, and it included future costs, not money that already had been spent.

In an update published earlier this calendar month, Crawford said U.S. military spending in the Middle East "and the additional spending on Homeland Security, and the Departments of Defence and Veterans Affairs since the 9/11 attacks," has cost $4.3 trillion in current dollars through financial year 2017, which ended Sept. thirty, and will cost more $five.6 trillion through the year 2056.

In lamenting the cost of the Middle East wars, Trump added, "We're going to first spending here."

Trump's proposed financial year 2018 budget includes $64.6 billion for Overseas Contingency Operations, which is the category for connected war machine operations in the Middle Eastward. That's $18.2 billion, or 22 percent, less than fiscal 2017. His budget includes deeper cuts in domestic spending — including cut nearly a third of the Environmental Protection Agency'south budget and eliminating entire programs, such every bit the Community Development Block Grant programme in the Department of Housing and Urban Development, which received $three billion last financial twelvemonth.

Empty Job Avowal

Trump again took credit for ascent employment, noting that two million jobs have been added to the economic system since his election. "Nobody expected that," Trump said. That number, he said, is "a lot better, at this indicate, than anybody ever even thought possible." Later, he added, "We used to lose millions. At present we've created 2 million jobs since I won the election."

Equally we have written, Trump inherited an economic system that was experiencing steady chore growth. It'due south truthful that the economy lost millions of jobs during the Great Recession. Simply when Trump took role, the economy had gained jobs for 75 straight months – the longest streak on tape. That streak has connected under Trump.

We typically measure employment from the president's inauguration, rather than from the election. Trump chooses to offset the clock from his election, arguing that chore growth is due in part to consumer confidence buoyed past his victory.

Just even using this measuring stick, there's nothing unusual near the task growth. It's true that the number of jobs in the U.Southward. has grown by two million in the 12 months since October 2016, the month before Trump was elected. Only information technology grew by 2.4 million in the 12 months prior to that, by ii.eight million the year before that, and past ii.7 million, ii.4 million and 2.ane meg in the years earlier that. In other words, the job growth of 2 meg between October 2016 and October 2017 was less than the growth in each of the previous 5 years.

Prison for Puddles?

Trump took a suspension from discussing the GOP tax plan to repeat a simulated conservative talking point about the Clean Water Act. He said that, because of a 2015 redefinition of what waters are regulated under the act, people would get to jail if they "affect" a puddle on their land. But the 2015 rule explicitly excludes puddles from the regulation.

Trump: You know what I've done for farmers. Where if y'all had a piffling puddle in the middle of your field, yous go to jail if you touch it, right? You lot know what I'm talking about. Not anymore. Non anymore. Non anymore.

Since 1972, the Clean Water Human activity has made it "unlawful for any person to discharge any pollutant from a signal source into navigable waters, unless a permit was obtained." The EPA defines bespeak source pollution equally coming from a specific source, such as a pipe, ditch or river tributary. This is opposed to nonpoint pollution, such equally runoff.

In 2015, the EPA and the Army Corps of Engineers redefined which waters can be regulated under the act to reflect new science and courtroom decisions, among other factors. According to the 2015 dominion itself, "Fewer waters volition exist defined equally 'waters of the United States' under the rule than nether the existing regulations."

The 2015 rule explicitly excluded puddles from regulation nether the Clean Water Human activity.

U.Southward. Army Corps of Engineers and EPA, June 25, 2015:The final rule adds an exclusion for puddles. The proposed rule did non explicitly exclude puddles because the agencies accept never considered puddles to meet the minimum standard for being a "h2o of the Us," and it is an inexact term. A puddle is commonly considered a very pocket-sized, shallow, and highly transitory pool of water that forms on pavement or uplands during or immediately after a rainstorm or similar atmospheric precipitation event. Still, numerous commenters asked that the agencies expressly exclude them in a rule. The final rule does then.

When Sen. Ted Cruz made a similar claim in March 2016, William Rodger, a spokesman for the American Farm Bureau Federation, told PolitiFact that the wide language of the 2015 rule would allow puddles to exist classified every bit vernal pools or wetlands and, thus, still be regulated.

But this rationale wasn't disarming to the 7 environmental experts PolitiFact interviewed in October 2015, when Sen. Marco Rubio made a similar claim. For example, William 50. Andreen, an ecology law professor at the Academy of Alabama said, "There are no cases on bespeak because the agencies have never asserted jurisdiction in such fantastical situations," adding, "It is an absurd assertion."

In June, the EPA and the Regular army Corps proposed to rescind the 2015 dominion. This followed a February executive order calling for the EPA and the Army Corps to reevaluate whether the rule keeps the land "gratuitous from pollution," while likewise "promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of the Congress and the States under the Constitution."

According to a Nov. xvi EPA press release, the agencies are withal reviewing public comments about the proposal to rescind the rule. They're as well "holding listening sessions with stakeholders" with the aim of developing another rule to again redefine "waters of the United states of america" nether the Make clean Water Act.

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Source: https://www.factcheck.org/2017/11/trumps-claims-dont-add/

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