Michael Bloomberg criticizes that the Trump administration's tax reform is a trillion dollar blunder.

Fiona Sydney

2017-12-09 08:37:00 Sat ET

Michael Bloomberg, former NYC mayor and media entrepreneur, criticizes that the Trump administration's tax reform is a trillion dollar blunder because it adds another $1.5 trillion federal budget deficit to government debt over the next few years. The corporate tax cuts may restrict the U.S. government's ability to invest in education and infrastructure, may render health insurance more expensive, and may have no impact on real wage growth. Harvard public finance professor Martin Feldstein, however, says this tax overhaul is worth its costs because U.S. corporations will use their tax cuts to boost real wages and capex investments, and these firms will repatriate $2.5 trillion offshore cash to invest in job creation, manufacturing automation, and R&D innovation. In line with some economists' op-ed articles and blog posts on the probable effect of the Trump corporate tax cuts on real wage growth, a firm invests up to the point that the after-tax return on its labor and capital investments equates the return that investors require to allow the firm to expand its factor inputs. As the firm receives income tax breaks, it finances the purchase of new machines, plants, and computers. These capital expenditures make the typical worker more productive. Then the firm wants to hire more workers to run the new machines and computers etc. As a result, the typical firm raises real wages until the economy restores its steady state. Hence, tax cuts can effectively boost real wage growth ceteris paribus.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Can the Chinese renminbi become the next dual global reserve currency in addition to the American dollar?

Daphne Basel

2020-08-01 07:28:00 Saturday ET

Can the Chinese renminbi become the next dual global reserve currency in addition to the American dollar?

Technological advances, geopolitical risks, and pandemic outbreaks cannot shake investor confidence in the American dollar as the global reserve currency.

+See More

Global economic uncertainty now lurks in a thick layer of mystery.

Jonah Whanau

2019-03-01 13:36:00 Friday ET

Global economic uncertainty now lurks in a thick layer of mystery.

Global economic uncertainty now lurks in a thick layer of mystery. This uncertainty arises from Sino-U.S. trade tension, Brexit fallout, monetary policy nor

+See More

Apple enters a multi-year content partnership with Oprah Winfrey to provide new original online video and TV programs.

Daisy Harvey

2018-06-10 19:41:00 Sunday ET

Apple enters a multi-year content partnership with Oprah Winfrey to provide new original online video and TV programs.

Apple enters a multi-year content partnership with Oprah Winfrey to provide new original online video and TV programs in direct competition with Netflix, Am

+See More

Harvard financial economist Alberto Cavallo empirically shows the recent *Amazon effect* of faster retail price adjustments.

Amy Hamilton

2018-08-23 11:34:00 Thursday ET

Harvard financial economist Alberto Cavallo empirically shows the recent *Amazon effect* of faster retail price adjustments.

Harvard financial economist Alberto Cavallo empirically shows the recent *Amazon effect* that online retailers such as Amazon, Alibaba, and eBay etc use fas

+See More

Trump administration imposes 20%-50% tariffs on Turkish imports due to a recent spat over the detention of an American pastor.

Apple Boston

2018-08-11 14:35:00 Saturday ET

Trump administration imposes 20%-50% tariffs on Turkish imports due to a recent spat over the detention of an American pastor.

The Trump administration imposes 20%-50% tariffs on Turkish imports due to a recent spat over the detention of an American pastor, Andrew Brunson, in Turkey

+See More

The global market for GLP-1 weight-loss medications can grow substantially to benefit more than 1 billion people worldwide by 2030.

Monica McNeil

2025-10-31 12:26:00 Friday ET

The global market for GLP-1 weight-loss medications can grow substantially to benefit more than 1 billion people worldwide by 2030.

With respect to wider weight loss treatment and obesity treatment, the global market for GLP-1 medications now grows substantially to benefit more than 1 bi

+See More