Business Investment Soars Following Trump Tax Cuts

business investment tax cuts

If you listened to liberals, you’d have thought that the businesses which benefited from the Trump tax cuts would only use those funds to enrich their executives. And while corporations have used some of their tax savings to buy back shares and hike dividends, there’s been a surge in both business spending and business investment since the Trump tax cuts took effect.

In what’s an obvious inflection point after years of stagnation, business investment is finally on the upswing, and it coincides perfectly with the Trump tax cuts. Capital expenditures, which include spending on factories, equipment, and other capital goods, are increasing at their fastest pace in recent years.  The 500 corporations that compose the S&P 500 index spent $167 billion in the first quarter of the year, which was the fastest pace in seven years and a record for a year’s first quarter.

This has been accompanied by record-low unemployment, and if you want to understand why the economy is suddenly expanding so strongly, think about how the tax money was spent before the tax cuts (on government programs rife with waste and fraud that produce no goods), versus how the money is being spent now (on factories and jobs and innovative new products).

business investment tax cuts

According to a new report in the Wall Street Journal, the oil and natural gas sector in particular is making a comeback this year, aided in part by these tax cuts, among other regulatory reductions under the Trump administration. Next year, Texas will be producing more oil than Iraq or Iran. “The Energy Information Administration announced this month that the port district of Houston-Galveston began exporting more crude oil than it imported for the first time. Houston-Galveston exports in April surpassed imports by 15,000 barrels a day, and by May the difference had grown to 470,000 barrels a day. That port district handles more than half of all U.S. crude exports, which hit a record of two million barrels a day in May.”

While we won’t be a net exporter anytime soon, the gap between imports and exports shrank to a 24-year low of 6.8 million barrels per day (from over 9 million in 2012).

Now if only Congress could decrease their spending dramatically, we’d really see an economic renaissance in America.

By Matt

Matt is the co-founder of Unbiased America and a freelance writer specializing in economics and politics. He’s been published... More about Matt

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