Small Businesses See Big Results

It’s often said that small businesses are the backbone of America. But big government hasn’t always done all it can to make things simpler for these smaller enterprises. Fortunately, the Tax Cuts and Jobs act has changed that for small business owners across the country.

After years of stagnation a mother daughter business that started in their garage is finally getting a break. The TCJA cut their rates, which allowed them to increase wages, ramp up employment, and grow their product line. All of this has helped them make significant investments in the family business and allowed them to give back to their community.

This is one of thousands of real life stories of people benefiting from the TCJA. Small businesses have been able to hire people at the highest level in 45 years, meaning more jobs and better wages.

Thanks to the TCJA Unemployment is at its lowest level since 1969 at 3.6 percent. In April alone, the U.S. economy added 263,000 new jobs. On top of that, America’s first quarter GDP grew by 3.2 percent; marking the first growth over 3 percent since 2015. Finally America is looking out for small business owners and ushering in a new era of economic growth.

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!

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.

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.