Tax Reform: the Gift that Keeps on Giving

America has just received its midterm economic report card, and our founding fathers would be proud. According to the Commerce Departmet American GDP increased 3.1% from the 2017 fourth quarter to the 2018 fourth quarter. This is the largest increase in 13 years. Fox News has also reported that a decade after the bull market in 2008 the Dow and S&P have risen over 300% from their record lows.

Mark Weinberger, CEO of EY, is confident that the best is still yet to come. Though fixing our economy will take time, the Tax Cuts and Jobs Act (TCJA) is a step in the right direction towards increasing wages and commercial productivity.

All of this economic progress would not have been possible without the relief from the TCJA. Business is booming again thanks to the substantial corporate tax rate reduction and increase investment. Let’s keep it that way!

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.

Tax Reform is Helping Workers, Middle Class Families—How Much Will You Save?

Recently, the Tax Foundation—a non-partisan tax policy non-profit—announced the release of a “tax calculator” to help people figure out how much the Tax Cuts and Jobs Act (TCJA), which was passed and signed into law last December, will “affect taxpayers in scenarios similar to their own.”

This is a fantastic tool—and an even better idea. Why? Because, as the Tax Foundation accurately notes, with the passage of the TCJA, “many Americans are wondering what will actually happen to their tax liabilities when they file their 2018 taxes early in 2019.”

Click here to learn more about the calculator and here to see what the impact would be for sample taxpayers.

Here are some examples:

  • “James” is single, has no children, and earns $30,000 a year. He also takes the standard deduction. Under previous law, James paid $4,331 in taxes, but under the TCJA, he’ll pay $3,953—a 1.26% cut with tax savings of $379.
  • “Jason” is single, has two children, lives in a single-earner family, and makes $52,000 a year. He also takes the standard deduction. Under previous law, Jason paid $5,198 in taxes, but under the TCJA, he’ll pay $3,306—a 3.64% cut with tax savings of $1,892.
  • “Amber” is single, has no children, lives in a single-earner family, and makes $75,000 a year. She also takes the standard deduction. Under previous law, Amber paid $16,104 in taxes, but under the TCJA, she’ll pay $14,327—a 2.37% cut with tax savings of $1,892.
  • “Kavya and Nick” are married, have two children, live in a single-earner family, and make $85,000 a year. They also take the standard deduction. Under previous law, Kavya and Nick paid $11,035 in taxes, but under the TCJA, they’ll pay $8,782—a 2.65% cut with tax savings of $2,254.
  • “Sophie and Chad” are married, have two children, live in a double-earner family, and makes $85,000 a year. They itemize their deductions. Under previous law, Sophie and Chad paid $29, 345 in taxes, but under the TCJA, they’ll pay $27,122—a 1.35% cut with tax savings of $2,224.

Want to know how much you’ll save?

For more information—and to create a custom tax scenario for you or your family—take a look at the Tax Foundation’s main tax calculator page.

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.

The More We Learn About Tax Reform (and Feel Its Impacts), the More We Like It

Since November, the American Action Network (AAN) has been tracking what Americans think about the Tax Cuts and Jobs Act—the massive pro-growth tax reform law passed by Congress late last year. In 2018, AAN has also been conducting surveys to see what the impacts of the new law are in 60 districts across the nation.

It sure seems like the more that people know about and experience the law’s positive impacts, the more they like it (and the more politically supportive they are of those who promoted and passed it).

Last month, AAN released the latest of these tracking polls, noting correctly that when it comes to politics and the mid-term elections this November, the “single most important issue this year is whether middle-class families believe that the Tax Cuts and Jobs Act is lowering their taxes.”

In January, AAN’s tracking wasn’t very encouraging on this front. At that time, “more Americans thought the Tax Cuts and Jobs Act would raise their taxes.” But between January and February, “Americans across the country have learned more about the tax cuts,” and there were “major changes” of opinion “even in states like New York and California, where the bill [previously] received the most negative coverage.”

These findings are “similar to recently released public polling,” which has also shown “swings in favor of the tax bill” across the nation, which “are directly responsible for the improved standing of the Republican party.”

It’s little wonder that middle-class families and others approve of our new pro-growth tax code. Already, hardworking people are seeing more money in their paychecks as their taxes go down (and, in many cases, from big bonuses from employers that are a direct result of tax reform). And they are benefitting from an economy growing at a robust clip, massive job creation, and meaningful wage growth.

Tax reform is working—not just for Wall Street and Big Business, but also for Main Street small businesses and working people. Cutting taxes and simplifying the tax code for both businesses and individuals was the right way to get the economy back to real, lasting growth.

After 30 years of competing and living with an onerous tax system weighing them down, all Americans are now facing a future with more confidence.