Thanks to Tax Reform America is Strong, and Still Getting Stronger

For the First time since the Great Recession in 2008 lower-end earners are getting greater benefits than higher-end earners. According to the Bureau of Labor statistics earnings rose by 3.4%, which marked the seventh consecutive month that saw earnings increase by 3% or more. This solid growth across income levels is an excellent indicator that our Economy is thriving. CNBC’s Jeff Cox even said that this wage trend could prove that our economy will be able to maintain the growth seen in 2018.

Our economy is not only prospering domestically, but globally as well. The Tax Cuts and Jobs Act has helped the American economy a force to be reckoned with. Thanks to the reduction of the corporate tax rate the American economy has become the most competitive economy in the world. GDP growth went up 3.1% in 2018, wages grew by 3.4%, and unemployment is at its lowest point in the past 50 years.

Many members of Congress are optimistic about the sustainability of this economic surge, despite the Democrats harping on the shortcomings of the TCJA during this week’s House Ways and Means Committee hearing. Representative Kevin Brady is insistent that this economic growth is not the precursor to a slowdown, disregarding the recent assertion that it is nothing more than a “sugar high”.

Tax reform has offered an incredible boost to our economy. Thanks to the TCJA business is booming, and there is no end in sight.

Tax Reform is Paying Dividends

According to CNBC, job openings are at a record high. The Labor Department claims that the reported 7.3 million open jobs in December was the highest in the past two decades.  If that news wasn’t big enough, the Commerce Department also reports that America’s fourth-quarter GDP increased 2.6%, outperforming original estimates.

The Tax Cuts and Jobs Act (TCJA) has undoubtedly played a major role in improving the economy since the bill was passed in December of 2017. Companies of all sizes are able to hire more employees, provide higher wages and bonuses, and fund improvements to their businesses thanks to the TCJA.

American business owners would like to thank Congress for their efforts in promoting the economic growth. We hope Congress continues to work on behalf of businesses, small and large, to ensure more growth, and protect us from burdensome regulations that would damage this economic prosperity.

This news also comes at a time when some members of Congress are already seeking to raise taxes in order to fund other projects. This would be a harmful misstep that would have massive implications for the business community across the country.  We are starting to reap the benefits of tax reform and to undo it would harm every business in the country.

Rep. Brady Very Bullish On Positive Impacts of Tax Reform

On Monday, April 16—the day before Tax Day—House Ways and Means Committee Chairman (and architect of the Tax Cuts and Jobs Act) Rep. Kevin Brady (R-TX) penned an excellent piece in USA Today about Americans filing their taxes for the last time under the previous, anti-growth tax code.

In the piece, Brady writes that on Tuesday, April 17, “we Americans file our taxes—for the last time—under the old, broken tax code…Goodbye and good riddance to that outdated, monstrosity of a tax code that took too much of your money, sent our American jobs overseas, and kept our economy so slow many workers didn’t see a pay raise for a decade or more.”

Brady says that, going forward, Americans “should all take comfort knowing that this time next year they’ll file under the new, modern tax code that lowers taxes for families and local businesses—and leapfrogs America to the lead pack among the world’s tax codes.”

What does this mean for you and me? Well, “starting now, individuals and married couples will keep more of their hard-earned money and take home a bigger paycheck,” in the form of “lower tax rates across the board and a standard deduction that has been nearly doubled.” A typical family of four earning the median annual income of $73,000 can expect to see a “total tax cut of $2,059.” And “for a newlywed couple earning $61,000 or less, they won’t pay a cent in federal income tax.”

Brady adds that, under the new tax code, we’re “already seeing more jobs, larger paychecks and new investments in the USA—but the best is yet to come” because the new tax code “no longer runs roughshod over hardworking families or Main Street businesses, but instead embodies the principle that Americans know how to spend their own money better than a bureaucrat sitting in a Washington office.”

“It’s now undeniable that tax reform is boosting the economy, and that American families are already benefiting,” says Brady. “More than 400 companies—and counting—have announced pay raises, bonuses and investments in their workers and businesses,” and “more than 4 million Americans are seeing pay raises and new benefits,” and wages “are growing and unemployment is low—with U.S. jobless claims at their lowest level since 1973.”

Specific to small businesses, Brady says that “thanks to tax reform, we now have lower tax rates for local businesses—including a first-ever small business deduction to protect 20% of their income from taxes.”

This means “small businesses, where almost half of America’s private-sector workforce is employed, will have more money to invest, hire and grow in their community.”

“It should come as no surprise that small business optimism is now at the highest level since 1983,” he adds. No surprise at all!

NAM Survey Finds Manufacturing Optimism Skyrocketing

A recent National Association of Manufacturers (NAM) study shows many key indicators for the manufacturing sector’s economic health are “at record highs following enactment of the Tax Cuts and Jobs Act” late in 2017.

“Empowered by tax reform and regulatory relief, manufacturers are now investing in our people through new jobs, higher wages, bonuses and growing our operations right here in the United States,” said NAM President and CEO Jay Timmons. “We’re delivering on our promises—despite what the doubters, deniers and detractors said.”

Timmons also said that to “keep this momentum going, to take us to the next level, manufacturers now want to see action on infrastructure, further regulatory relief and more opportunities to sell our products overseas.”

He added: “Manufacturers are proving that when the President and lawmakers deliver on policy, we will deliver for the American people.”

Here are some key takeaways from the survey:

  • “Optimism among manufacturers registered its second-highest level ever recorded (93.5 percent) in the 20-year history of the survey;”
  • “Optimism among small manufacturers registered its highest level ever recorded (94.5 percent) in the 20-year history of the survey;”
  • “All-time highs for projected employment growth, capital spending and inventories;”
  • “Projected wage growth registered its fastest pace in 17 years; and”
  • “Projected sales growth registered its second-highest reading in the 20-year history of the survey.”

NAM also notes that the release of their survey results “coincided with a tax reform event in the Rose Garden of the White House, where President Donald Trump touted the new data showing manufacturers’ positive economic outlook.”

Companies Putting Money Back Into The Economy—Thanks to Tax Reform!

Since Congress passed and President Trump signed into law the Tax Cuts and Jobs Act last year, the good news for working people and families just keeps rolling in. Not only are middle-class households getting a tax cut (which they are already seeing in their paychecks), many are also getting raises, bonuses, and increased benefits from their employers.

Take, for example, the Georgia-based electrical wire producer Southwire. The Atlanta Business Chronicle reported in March that the company “will pay out $9 million in bonuses and benefits to employees thanks to tax reform.” The article details what this means to Southwire’s nearly 7,500 workers: “full-time employees in the United States, not including executives and upper management, will each receive a $1,000 bonus…Part-time employees will get $250 bonuses.”

The company also said it will “expand its parental leave policy” and “offer a bridge scholarship program for eligible hourly employees seeking to further their education through a two-year degree, four-year degree or technical certification.” This means real money and real benefits for hardworking individuals and families—keep this in mind the next time you hear someone claim the tax reform law only benefits the wealthy and Big Business.

Another great example is a household name: the spice and flavorings firm McCormick & Co. Inc. According to the Baltimore Sun, the Maryland-based company said in March it would share some of the money it saves from tax reform “with eligible hourly employees in the form of $1,000 one-time bonuses in May,” as well as accelerating “hourly wage increases.”

The Baltimore Sun also reported in February that another Maryland-based company—developer St. John Properties Inc.—”will give each of its 180 employees a one-time cash bonus of $1,500 in response to the Republican tax overhaul passed in December.” The company said its decision was made “after reviewing expected advantages of the Tax Cuts and Jobs Act.”

In the tax reform fight last year, companies of all sizes said that they would pass along the benefits of corporate tax reform to their employees and customers—and naysayers claimed it wouldn’t happen. Now that tax reform is in place, it seems like a week doesn’t go by without hearing about another company giving bonuses, raises, or better benefits, or expanding facilities or cutting costs for their customers. Companies are doing what they said the would.

The Tax Cuts and Jobs Act is a pretty accurately named piece of legislation. But it would be even more accurate—if not making for a best acronym—if it was called the Tax Cuts, Jobs, Wage and Salary Increase, Bonuses, Better Benefits, Expand Facilities, and Give Back to Customers Act (TCJWSIBBBEFGBCA). Because that’s what it really is.