Donald Trump and the Tax Cuts and Jobs Act
In January 2018, President Donald Trump was full of optimism. He had just signed the most substantial legislation of his young presidency, the Tax Cuts and Jobs Act (TCJA), making major changes to the tax code. Echoing his campaign slogan—Make America Great Again—Trump emphasized the power of tax cuts to drive economic growth. TCJA divided the U.S. Congress. The Republican Speaker of the House Paul Ryan (R-WI) celebrated it as "something I have been working on for my entire adult life,” and Senate Majority Leader Mitch McConnell (R-KY) cheered: “2017 was the best year for conservatives in the 30 years that I’ve been here. The best year on all fronts.” But Democrats attacked the bill from several angles. House Minority Leader (and former Speaker) Nancy Pelosi (D-CA) said: "This GOP tax scam is simply theft, monumental, brazen theft from the American middle class and from every person who aspires to reach it… The GOP tax scam is not a vote for an investment in growth or jobs. It is a vote to install a permanent plutocracy in our nation.… And it betrays the future and betrays the aspirations of our children." As in Congress, U.S. public opinion at the time of the bill’s passage was mixed but sharply split along party lines. Which appraisal of TCJA would prove to be right? Would TCJA's changes last, or would the American public end up rejecting them and vote in a government to reverse them? Were Trump and the Republicans charting a course toward prosperity, or had they taken a wrong turn?
Keywords: Taxation; Jobs and Positions; Government and Politics; Public Opinion; United States;
Citation:
Weinzierl, Matthew, and Robert Scherf. "Donald Trump and the Tax Cuts and Jobs Act." Harvard Business School Case 719-002, July 2018. (Revised September 2018.) View Details
