Determining if tax legislation is effective and accomplishing the goals of Congress in pushing the bill forward is not always easy to discern. Moreover, the longer-term effects on the economy of any specific tax bill requires that longer term for proper assessment.
Interestingly, this particular bill, the Tax Cuts and Jobs Act, seems to be having a rapid, and profound effect on the United States economy. In an interesting article published by the Wall Street Journal titled, “ The Tax Law, Just One Month Old, Is Roaring Through U.S. Companies”, it was reported that the effects of the tax law are “rippling through corner offices and boardrooms, with companies large and small dusting off once-shelved plans, re-evaluating existing projects and exploring investment in factories and equipment.”
The article goes on to add a quote, “Already, analysts expect the legislation to provide a 7% to 8% boost in aggregate per-share profits for the companies in the S&P 500 this year, said Joseph LaVorgna, chief economist for the Americas at Natixis, an international financial-services arm of France’s Groupe BPCE banking firm.”
The question come up regularly as to whether the bill, as enacted, is a good bill. In reality, only time will confirm or deny that notion. However, rarely are precious funds better off and more efficiently utilized in the hands of the federal government than the companies and individuals who generated those funds. From that perspective, the bill is a refreshing change from the tax and spend policies of recent years. Hopefully, the future economic benefits from the opportunities presented by the Tax Cuts and jobs Act will serve to help all Americans.