It’s February, time to start enjoying those GOP tax cuts.
That’s the hype from the Koch brothers and Republicans, who together will spend billions on propaganda praising the tax cuts and demonizing Democrats for opposing the measure.
Most Americans who are employed and pay income taxes should begin to see bigger paychecks. Many employers are changing withholding amounts in paychecks starting this month. How much paychecks will grow depends on numerous factors, including your salary, family situation and where you live.
Other advertised benefits of the tax cuts are less certain. There’s doubt, for example, that the cuts will generate big economic growth, despite the boasts and bluster from the White House.
In coming months, voters can watch a variety of metrics to see how the tax cuts play out. One is economic growth.
The Trump administration promises a minimum of 4 percent GDP growth annually with the tax cut.
The nation’s economy grew 2.3 percent in 2017. That was better than in 2016 and ranked third if you look at the past five years. At the same time, the global economy is gaining traction, with developed nations having some of their best growth in a decade.
It’s possible U.S. companies and investors were hanging back the last few months of 2017, waiting to see what happened with taxes. If that’s the case, we should see unusually fast growth in 2018.
Additionally, the cuts include extraordinarily generous provisions for expensing new equipment and similar investments. Most economists predict that the front-loaded tax-cut plan will return the biggest economic payback in the first couple of years.
Then the benefits fade — even as the budget deficit balloons by more than $1 trillion.
If the economy can’t hit 4 percent annualized growth in 2018, the GOP will have failed to deliver on a key promise: That growth fueled by the cuts would make up for losses in government revenue.
Other big promises were more jobs and better pay.
In 2017, the U.S. economy created 2.1 million new jobs, down slightly from 2016. Economists expect even less growth in 2018.
Chances are better for growth in wages, if the labor market grows so tight that employers find it harder to hire qualified workers.
Workers’ pay has been stagnant or barely growing for several years. Kansas has lagged behind even the paltry gains made nationally.
Over the past couple of months, lots of companies announced higher wages and bonuses in the aftermath of the tax cuts. In 2018, government data on wages will tell us if those announcements were public-relations gimmicks or whether they signal real gains made by workers.
Job growth and economic gains in Kansas will depend mightily on international trade.
President Donald Trump promised his tax cuts would help reduce the trade deficit, by bringing more manufacturing to the United States.
In addition to tax policy, Trump has used tariffs and threats as key trade policy provisions.
So, in addition to the budget deficit, the trade deficit is another metric to watch.
Final numbers aren’t available, but it appears the U.S. trade deficit grew in 2017.
In part, that is good news; it reflects consumer confidence. Americans are buying more stuff, even if it is made in another country.
What warrants a close watch are exports. Kansas, with its aviation and agricultural sectors, depends on overseas sales. As the U.S. share of export markets shrinks, so do opportunities for Kansas farmers and manufacturers.
At the same time, the United States is drawing fewer tourists from abroad, and our universities are seeing drops in enrollment among international students. The economic loss is substantial, but the drops also reflect a change in how the world perceives the United States.
Many Americans claim they care not at all what the world thinks of us. But we should understand that the United States has never successfully operated in isolation from the rest of the world. Our strength as a nation has always depended on relationships around the globe.
As with cutting taxes, severing our ties with other countries comes with consequences. And those consequences are often different from the promises politicians make.
A native of Garden City, Julie Doll is a former journalist who has worked at newspapers in California, Indiana and New York, as well as across Kansas.