from today’s WSJ, Stephen Moore- Trump’s Middle-Class Economic Progress
The latest data from the Census Bureau monthly surveys tell a different story. Real median household income—the amount earned by those in the very middle—hit $65,084 (in 2019 dollars) for the 12 months ending in July. That’s the highest level ever and a gain of $4,144, or 6.8%, since Mr. Trump took office. By comparison, during 7½ years under President Obama—starting from the end of the recession in June 2009 through January 2017—the median household income rose by only about $1,000.
Sentier’s income data dates to 2000 and tells the story of the past two decades. The recession of 2008-09 crushed middle-class incomes so dramatically that the median income when Mr. Obama left office was no higher than it was when George W. Bush arrived. That was the middle-class and blue-collar squeeze Donald Trump tapped into.
Mr. Obama inherited a financial mess, but the median income continued its decline during almost all of his first term and rose only slowly in his second term—the weakest recovery from a recession since the 1930s. “We never saw a recovery where incomes took such a long time to recover the lost ground,” says Sentier founder Gordon Green.
The data counters the false refrain of the Trump cuts only benefiting the rich. While I have repeated this refrain for years, the actual tax rates matter more than the statutory rates. The difference is the Special Interest Spread- SIS- a term I coined in this article: Save the Swamp.
The Trump tax cuts drastic restriction of the deductibility of the state and local taxes, and the limit on other deductions such as professional fees severely limited the benefit of the statutory rate reductions on the wealthiest. The dramatic reduction in corporate rates seems to have definitely benefited wage earners, with higher page and lower unemployment. This growth in stock values does not just benefit yacht owners as Ms. Warren implies; it benefits the retirement accounts of millions of workers, igniting a wealth effect that promotes spending.