With better trade deals and tax cuts, Trump can usher in an economic boom

I’ll readily admit it: President Trump’s tariff battles have caused market turmoil, business disruption and a temporary loss of consumer confidence in the economy.As an economist, I’m nervous about the ongoing trade war — but it could have a major upside.If Trump’s brinksmanship gets our major trading partners to lower their existing tariffs, we could end up with freer trade than we had before.Meanwhile, the tariff turbulence has largely overshadowed the tremendously positive steps that Trump has taken to promote prosperity here at home — and the unprecedented speed at which he has taken them.Trump’s 2017 tax cut was an enormous driver of economic success — and contrary to naysayers’ predictions, actually raised revenue for the government.The average small business saw a 20% reduction in its tax rates, and the corporate rate fell from 35%, the highest in the world, to a below-average rate (now 21%), spurring investment and development.

Meanwhile, middle-class families saved on average more than $2,000.In addition, the 2017 bill was a huge tax simplification measure: It doubled the standard deduction — and now only 9% of Americans itemize deductions on their tax returns, saving them time, tax-preparation fees and stress.Critics’ accusation that the law merely brought a “tax cut for millionaires and billionaires” is bunk: The share of taxes paid by the richest 1% of tax filers was 40% of the total before the tax cut took effect — and is 44% now.Under the original 2017 law, the cuts were set to sunset this year, raising rates back to their previous economy-suffocating levels.Trump’s bill to make these tax cuts permanent has already passed its first hurdles in the House and Senate and will be on his desk for signature within the next two months.If Trump gets the corporate tax rate down to 15%, as he has championed, the US would have one of the lowest such rates in the world, attracting billions of dollars of new investment and hundreds of ...