https://fee.org/articles/us-household-incomes-increased-more-in-2018-than-in-the-previous-20-years-combined/US Household Incomes Increased More in 2018 Than in the Previous 20 Years—CombinedWhy did US incomes suddenly explode in 2018 after decades of tepid growth? The answer is not difficult to find.For years, a school of economists has complained that US wages have been virtually stagnant for decades.
“Jobs are coming back, but pay isn’t. The median wage is still below where it was before the Great Recession,” former Labor Secretary Robert Reich said in 2015. “Last month, average pay actually fell.”
In fact, it’s not hard to find data showing that wages have barely increased since the 1970s, a figure many have used to stoke classy envy.....
.....Government statistics, which use the Consumer Price Index to measure inflation, show that from 2002 through 2015 median weekly earnings
didn’t budge at all, but surged between 2018 and 2020.....
.....The question, of course, is why did US incomes suddenly explode after decades of tepid growth? The answer is not difficult to find.
The year 2017 saw massive deregulation and passage of the Tax Cuts and Jobs Act (TCJA). Estimates placed the deregulation savings at $2 trillion. But what was likely even a bigger factor was the cut businesses saw in corporate taxes.
Prior to 2017, the US had the highest corporate tax in the developed world (if not the whole world). With a top bracket of 35 percent, its corporate tax rate was higher than Communist China and socialist Venezuela.
This was a terrible policy on a number of levels. For starters, the revenue-maximizing rate of a corporate tax is 15-25 percent, which means anything above that isn’t even generating more revenue, it’s simply punitive and economically harmful. (Evidence bears this out. The United Kingdom, for example, reduced its corporate tax rate and saw revenues grow.).....