The Trump administration’s $1.5-trillion cut tax package appeared to have no major impact on businesses’ capital investment or hiring plans, according to a survey released a year after the biggest overhaul of the U.S. tax code in more than 30 years.
The National Association of Business Economics’ (NABE) quarterly business conditions poll published on Monday found that while some companies reported accelerating investments because of lower corporate taxes, 84% of respondents said they had not changed plans. That compares to 81% in the previous survey published in October.
The White House had predicted that the massive fiscal stimulus package, marked by the reduction in the corporate tax rate to 21% from 35%, would boost business spending and job growth. The tax cuts came into effect in January 2018.
The lower tax rates, however, had an impact in the goods producing sector, with 50% of respondents from that sector reporting increased investments at their companies, and 20% saying they redirected hiring and investments to the United States from abroad.
The NABE survey also suggested a further slowdown in business spending after moderating sharply in the third quarter of 2018. The survey’s measure of capital spending fell in January to its lowest level since July 2017. Expectations for capital spending for the next three months also weakened.
