Weekly Economic Snapshot 10/2 - 10/6

Economic Facts for This Week

• While wages for regular workers are have fallen in 39 states and the District of Columbia since President Trump took office, the Republican tax framework released last week aims to give tax cuts worth more than $129,000 each year to the top 1 percent of income earners and more than $722,000 for those in the top 0.1 percent.
• Rather than helping small businesses, the Republican proposal on pass-throughs would give the 400 wealthiest American households a $5.5 million tax cut. More than half of pass-through business income goes to the top 1 percent, while less than 15 percent goes to those earning in the bottom 60 percent of incomes.
• Under current law, less than 0.2 percent of estates pay any estate taxes—only those estates worth more than $5.49 million, or nearly $11 million for couples. Across the country, only 80 small businesses and farms are estimated to pay estate taxes in 2017.
• Instead of giving new tax cuts to the wealthy, Congress could do a lot to boost American competitiveness, like bridging America’s digital divide. Fewer than half of households with incomes below $20,000 have broadband subscriptions; in ten states at least one out of five people lack access.  

Chart of the Week:

Congressional Republicans want to cut the corporate tax rate to 20 percent, but corporations have already been taking home more of their rising profits tax free. Corporate profits increased by more than 40 percent from 1979 to 2015, relative to GDP, while corporate tax revenue has fallen by more than 30 percent over the same period. Big corporations can lower their corporate taxes using a menu of hard-lobbied deductions and credits and by using accounting tricks to shift their profits to low- or no-tax countries. More than half of U.S. companies’ foreign profits are reported in just seven tax havens.

ICYMI

• Despite taking taxpayer bailouts and paying themselves big bonuses during the Great Recession, new research shows America’s four largest banks severely curbed their lending to small business in the recovery. In 2010, these banks lent just 41 percent as much to small businesses as they did in 2006.
• Assets equal to 10 percent of world GDP are held in offshore tax havens, according to new research. Typical measures of income and wealth do not include such offshore holdings. This means that wealth is even more unequally concentrated than previously understood.
• As Puerto Rico reels from Hurricane Maria, policymakers might look to recovery under a green growth program that includes large-scale investments in low-cost, domestically-produced renewable energy sources and creates jobs and reduces costs for households.

Coming This Week

• Wednesday 8:30am: Personal Consumption Expenditures by State for 2016 - https://www.bea.gov/newsreleases/regional/pce/pce_newsrelease.htm
• Thursday 8:30am: U.S. International Trade in Goods and Services for August 2017 - https://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm
• Friday 8:30am: Employment Situation Report for September 2017 - https://www.bls.gov/news.release/empsit.toc.htm