The world continues to get better, but people consistently believe that it’s getting worse. Nearly 90 percent of respondents in a 2016 poll thought that global poverty had increased or stayed the same in recent decades, while just 1 percent correctly answered that global poverty had fallen more than 50 percent since 1990. With that kind of misplaced pessimism, it’s worth taking a moment to reflect on some of the ways the American economy improved on a grand scale over the last decade.
Likely the most obvious change the 2010s brought was our success in transitioning from an economy in recession to one that is booming. The national unemployment rate was at 9.6 percent in 2010, with fifteen states reporting rates of 10 percent or more. By November of 2019, the unemployment rate had dropped all the way to 3.5 percent. Only one state reported a rate above 6 percent — Alaska, at 6.1 percent.
The economy has improved by other measures as well. Wage growth — previously the white whale of recession recovery — reached a post-recession high in 2018. The state of the stock market is also better under the current president than it was under nearly any other.
In terms of economic success, one of the policies we can thank is comprehensive tax reform. The Tax Cuts and Jobs Act (TCJA), passed in late 2017, ushered in key reforms to American tax policy that have created a more hospitable environment for investment and economic expansion.
Among the important changes that the TCJA brought about was a long-needed reduction to the corporate tax rate to make it more internationally competitive. Our previous 35 percent rate was well above the 20.3 percent average rate in Europe, for example, despite how the American left often frames the latter as a bastion of socialism. U.S.-based businesses were at a severe tax disadvantage compared to their European counterparts, providing an incentive to relocate overseas. The TCJA significantly reduced that incentive.
Those high corporate tax rates were also responsible in part for previously stagnant wage growth. Even though corporate taxes are assessed on corporate profits, in reality labor ends up paying the majority of the tax — likely 70 percent or more. Despite the populist presentation of corporate tax cuts as a giveaway to the rich, this element of the TCJA was a pro-worker, pro-American business reform.
Tax reform also gave back to the American taxpayer by taking less from individuals in the first place. The Tax Policy Center estimated that 80 percent of Americans received a net tax cut under the TCJA, while just 5 percent saw a net tax hike. The average American middle-class family received a tax cut of about 1.7 percent.
Certainly, not everything about the 2010s was positive. Under President Trump, the country has also engaged in a destructive trade war that has imposed tens of billions of dollars’ worth of trade taxes on American consumers and businesses. Support for socialism has grown in the Democratic Party and its presidential primary, and the national debt continues to balloon unabated — there is plenty of room for improvement in the 2020s.
But all told, there’s much for Americans to be thankful for with the passage of another decade. The economy improved under conservative policies like tax cuts and support for markets, and that’s good for every American.
Andrew Wilford (@PolicyWilford) is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to fiscal policy analysis and education at all levels of government.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.