This is Mary Walden with economist MW, welcoming you to the economic perspective. Today’s program looks at the importance of business investment. Mike, as the new federal income tax law is taking effect, people are looking at their paychecks to see if less is being deducted for federal taxes. Many are smiling at what they are seeing. But is declining tax payments for workers the best gauge of the success of the new tax law?
- From an individual perspective, yes, this is what’s most important
- But from an economy-wide perspective, probably the impact on business investment is most important
- Will the new tax law motivate businesses to upgrade their technology and machinery
- If they do, makes our economy more efficient and internationally productive
- But also can help workers by making them more productive – which can lead to wage gains
- So far, we are seeing a spike in business investment – watch if continues