A new report shows that tax revenue in the United States fell more than any other developed country following President Trump’s tax cuts.
The US tax-to-GDP ratio fell by more than 2 percent between 2017 and 2018 while corporate tax revenues fell by 0.7 percent and personal income tax revenues fell by 0.5 percent, according to Organisation for Economic Co-operation and Development.
That is far more than any other nation saw in that time frame. Overall, the tax-to-GDP ratio of all OECD nations rose slightly from 34.2 percent to 34.3 percent while the US is at just 24.3 percent.
The closest nation to the US was Hungary, whose tax-to-GDP ratio fell by 1.6 percent.
Tax revenues fall after Trump’s tax cuts:
The trend is largely the result of the tax cuts passed by Republicans and signed by Trump in 2017.
The bill cut taxes by about $1.5 trillion and permanently reduced corporate taxes from 35 percent to 21 percent while temporarily cutting personal tax rates.
Despite cuts, little growth:
The tax cut barely affected economic growth in 2018, according to the nonpartisan Congressional Research Office. Companies spent a record $806 billion on stock buybacks after the bill was signed.
“In mid-November, Trump’s top economic advisor Larry Kudlow hinted that a middle-class tax cut is on the horizon, though it is unlikely that a Democratic-led House would pass new tax legislation ahead of the 2020 presidential election,” CNBC reported. “Democratic presidential candidates have roundly criticized Trump’s tax cuts for going mostly to top earners, vowing to further overhaul the tax code and implement a range of measures, from wealth taxes to curbs on stock buybacks.”