A National Association of Business Economics’ (NABE) surveys shows the $1.5 trillion U.S. Tax Cut has No Major Impact on Business Capex Plans.

The Trump administration’s $1.5 trillion cut tax package appeared to have no major impact on businesses’ capital investment or hiring plans, according to a survey released a year after the biggest overhaul of the U.S. tax code in more than 30 years.

The National Association of Business Economics’ (NABE) quarterly business conditions poll published on Monday found that while some companies reported accelerating investments because of lower corporate taxes, 84 percent of respondents said they had not changed plans. That compares to 81 percent in the previous survey published in October.

The White House had predicted that the massive fiscal stimulus package, marked by the reduction in the corporate tax rate to 21 percent from 35 percent, would boost business spending and job growth. The tax cuts came into effect in January 2018.

The NABE survey also suggested a further slowdown in business spending after moderating sharply in the third quarter of 2018. The survey’s measure of capital spending fell in January to its lowest level since July 2017. Expectations for capital spending for the next three months also weakened.

Where did the Money Go?

  • Stock buybacks
  • Dividends

The buybacks were a waste because valuations are insane. We did get something out of this: more debt.

The CBO says GOP Tax Law Will Add $1.9 Trillion to Debt.

According to the report, the tax law would cost the government $2.3 trillion in revenues, but economic growth would offset that figure by about $461 billion.

And as tax cuts go, this one was hugely one-sided. The middle class got peanuts.

The growth won't happen and the lost revenues will likely be worse. There were no spending cuts, and we did not even see the typical lie both sides employ: "This will pay for itself".

I am in favor of reduced taxes. But I am also in favor of balanced budgets.

Republicans are always in favor of spending cuts, provided Democrats are in charge.

Mike "Mish" Shedlock

In Praise of a Corporate Tax Cut

Bloomberg View columnist Tyler Cowen, a professor of economics at George Mason University and Marginal Revolution blogger says "Republicans have science on their side when it comes to corporate tax reduction." Is Cowen right? If so why?

Tax Bill Adds $1 Trillion to Deficit (Without Cutting Taxes for Most)

Nonpartisan analysis, from several places, shows the Senate tax bill will all $1 trillion to the deficit. What's next?

Pre-Tax Corporate Profits Rise 0.2%, After-Tax Corporate Profits Rise 6.7%

The Trump Tax cuts strongly came into play in today's GDP update which includes corporate profits.

Tariff Scorecard: 57 Companies Bitch About Trump's Tariffs, 7 Give Positive View

89% of companies taking a stand on Trump's tariffs are complaining. Consumers are taking it on the chin as well.

Tax Cut Stimulus Mish vs. Krugman: Libertarians Dead Wrong?

Curious Mix: Mainstream media and Libertarians both believe the Trump tax cuts will stimulate the economy. It won't.

Starve the Beast: Trump's Tax Cut Better for Businesses, Worse For Everyone Else

Corporate America is doing far better than most expected under Trump's tax cuts. But the cuts didn't pay for themselves.

"Faster Inflation From Tax Cuts"

According to Bloomberg, as cited by ZeroHedge, the Fed believes there will be faster inflation from the Trump tax cuts.

Big Investment Boom Following Trump Tax Cuts? Answer in Four Charts

Many expect a big investment boom thanks to Trump tax cuts. A few charts will show why they are mistaken.

McDonald's Shares Jump on Corporate Job Cuts, "Eliminating Layers"

McDonald’s president sent an email to all US employees announcing corporate job cuts. Wall Street is Happy.