Business is Booming from Historic Tax Reform

Businesses are thrilled over the positive benefits tax reform is continuing to provide for them. Hancock Lumber, a 171 year old Maine based lumber company, shared with the National Association of Manufacturers this week how it was able to accelerate its plans to grow and invest in its business because of tax reform.

“It’s pretty straightforward,” said Hancock Lumber CEO Kevin Hancock. “As a result of tax reform, our cumulative tax rate fell from 38 percent to 28 percent. We’re keeping a dime-on-a-dollar more of our earnings. And we’ve reinvested 100 percent of that back into the business.”

The company has also made a commitment to invest in its employees. Hancock said that in the last year following the historic Tax Cuts and Jobs Acts, Hancock Lumber has increased wages, increased 401K contribution, and increased annual bonuses.

“Tax reform is allowing us to do in three years what might’ve taken us four to five years to do otherwise. That’s pretty significant,” Hancock said in his interview with the National Association of Manufacturers. Hancock Lumber is just one of many examples of tax reform creating a better workplace environment as well as more opportunities for businesses to thrive.

Small Businesses Confident in their Finances Thanks to TCJA

Small businesses are doing better than ever thanks to President Trump’s historic tax cuts. Gallup recently released their quarterly Small Business Index survey. The overall index is +136, up from the +129 in Quarter 2. 58% of small business owners say their revenues increased in the past year, and 64% say they expect revenues to continue increasing.

Small businesses feel optimistic about their businesses, and the survey shows that this is mostly a result of a thriving national economy. 70% of owners think the US economy is excellent or good. The Tax Cuts and Jobs Act has created an environment that allows small businesses to remain competitive. Not having to worry about paying a high tax bill on top of the many other expenses that come with owning a small business is a major relief.

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!