Lower taxes and regulation=Rising wages.

To get growth in hourly earnings you need two things:

1. A tight labor (i.e. fewer people not working)
2. Employer optimism about demand

It's pretty clear that around 2017 something changed from the previous 8 years. My strong guess is that it was the election of a government that promised to lower corporate taxes and reduce regulatory burden. Any other guesses?

Reducing Corporate Income Tax would Create Jobs

A new paper from the St. Louis Federal Reserve concludes:

This paper finds that a reduction in the corporate income tax leads to moderate job creation and higher wages. In the extreme case, the elimination of the corporate income tax would reduce the non-employed population by 5.4 percent …

Yet the Obama administration's response to this has been not only to keep US corporate tax rates as the highest in the world, but to propose subjecting the foreign income of domestically based companies to US taxation as well. Now WHO is it that is driving jobs overseas?

Driving Investment Away From the US With High Taxes

During this campaign there have been accusations thrown around as to which candidate is driving jobs out of the United States. Can we take a step back, please, and recognize that our current tax rates incent companies and  investors to move assets (and therefore jobs) away from the US. Our integrated tax rate (which is the net tax on corporate earnings after corporate income taxes and capital gains taxes) is nearly the highest in the world. People respond to taxes which affect their net returns. That's why people are leaving California for Texas. It's why someone would direct investment to Canada or Mexico or New Zealand and away from high tax locales like the US and France.

The President and Democrats in Congress want to increase taxes on investment. That will just make the incentives even greater to direct capital away from the US.

Tax Breaks for Oil Companies

How many times have you heard someone claim that we need to get rid of "tax breaks for oil companies". The next time you hear that comment you might actually want to ask what they think is the current level of taxation. Below is a summary of taxes and profit from Exxon-Mobil over the last ten years. It's paid taxes equal to roughly THREE TIMES their profit. Is this still not enough? And from whom does Exxon get the money to pay those taxes? For the most part it would be the customers who buy Exxon's products. That would be you.