The corporate tax cuts that President Donald Trump signed into law in 2017 have boosted investment in the U.S. economy and delivered a modest pay bump for workers, according to the most rigorous and detailed study yet of the law’s effects.

Those benefits are less than Republicans promised, though, and they have come at a high cost to the federal budget. The corporate tax cuts came nowhere close to paying for themselves, as conservatives insisted they would. Instead, they are adding more than $100 billion a year to America’s $34 trillion-and-growing national debt, according to the quartet of researchers from Princeton University, the University of Chicago, Harvard University and the Treasury Department.

The researchers found the cuts delivered wage gains that were “an order of magnitude below” what Trump officials predicted: about $750 per worker per year on average over the long run, compared with promises of $4,000 to $9,000 per worker.

The study is the first to use vast data from corporate tax filings to draw conclusions about the Tax Cuts and Jobs Act, which passed with only Republican support. Its findings could help shape debate on renewing parts of the law that are set to expire or have begun to phase out.

That includes a key provision targeting investment, which the authors identify as the most cost-effective corporate cut. That benefit, which allowed companies to immediately deduct investment spending from their income taxes, would be renewed as part of a bipartisan tax bill that passed the House in January.

It also challenges narratives about the bill on both sides of the aisle. Democrats have claimed the tax cuts only rewarded shareholders and did not help the economy. Republicans have called them a cost-free boon to the middle class. Both appear to have been wrong.

“The evidence that taxes matter for investment really is there,” Gabriel Chodorow-Reich, a Harvard economist and one of the paper’s authors, said in an interview. “And the evidence that corporate tax cuts are expensive also is there. They’re both just features of the data.”

Republicans set many of the individual cuts to expire at the end of next year. Whether to renew them, all or in part, will be an immediate challenge for either President Joe Biden, if he wins reelection in November, or Trump, if he is successful in returning to the White House.

— New York Times

Small-business reporting law blocked

In a blow to the Biden administration’s effort to increase corporate transparency, an Alabama federal district judge has ruled that the Treasury Department cannot require small-business owners to report details on their owners and others who benefit from the business.

U.S. District Judge Liles C. Burke decided late Friday that the Corporate Transparency Act, a landmark U.S. anti-money laundering law enacted as part of the National Defense Authorization Act for fiscal year 2021, is unconstitutional on the grounds that Congress exceeded its powers in enacting the law — and so the rulemaking stemming from it is unlawful.

The National Small Business Association filed suit in November 2022 to block the requirement that tens of millions of small businesses register with the government as part of an effort to prevent the criminal abuse of anonymous shell companies.

A Treasury spokesperson said, “Congress overwhelmingly voted to enact the bipartisan Corporate Transparency Act in 2021 to crack down on illicit shell companies and combat financial crime. We are complying with the Court’s injunction” and referred The Associated Press to the Justice Department for further inquiries.

JetBlue, Spirit call off merger, citing timing

JetBlue Airways and Spirit Airlines are ending their proposed $3.8 billion merger weeks after a federal judge blocked the deal.

JetBlue said Monday that even though both companies still believe in the deal, they were unlikely to meet the closing conditions required in the agreement before a July 24 deadline.

JetBlue’s new CEO, Joanna Geraghty, called the merger “a bold and courageous plan intended to shake up the industry status quo” and speed JetBlue’s growth.

Spirit CEO Ted Christie said he was disappointed that the airlines could not combine and create a new challenger to the nation’s four biggest airlines but said he is confident that Spirit — which has been losing money since the pandemic started — can succeed on its own.

— From news services