Tax Cuts That Put America First

The Tax Cuts and Jobs Act of 2017 is the biggest tax overhaul in a generation.

The Facts: 

  • The Tax Cuts and Jobs Act of 2017 is the biggest tax overhaul in a generation.

  • Individuals, families, workers, and businesses, large and small, are already feeling the effects of the legislation, signed into law by President Trump on December 22, 2017.[1]

  • A majority of Americans support the tax bill, and public opinion for the bill has gone up since it was passed into law. In late February, a New York Times poll showed that the majority of Americans (51%) support the tax reform, as opposed to 37% approval in December, when the law was passed. The rise in public opinion is attributed to the fact that more and more Americans are beginning to see tangible effects in their communities, companies, and paychecks.[2]

  • Additionally, some employers only changed their withholdings starting with the late-February paycheck, which means recent polls may not reflect additional support the reform will receive once those paychecks kick in.[3]

  • A February 2018 national poll commissioned by America First Policies reveals that more voters today support the tax reform plan than oppose the plan—a net 17-point swing in favor of tax reform since November 2017.[4] 

  • The legislation provides $1.5 trillion in tax cuts – and more than half of that goes to families.[5]

  • According to the House Ways and Means Committee, the typical family of four earning the median income of $73,000 will receive a tax cut of more than $2,000 a year.[6]

  • The Act nearly doubles the standard deduction.[7]

  • American families will see their Child Tax Credit doubled to $2,000 per child under age 17.[8]

  • The Act also repealed Obamacare’s individual mandate. The repeal of Obamacare’s individual mandate will especially provide relief to households with income below $50,000, which made up nearly 80 percent of the households that paid the mandate penalty in 2015.[9]

  • According to Americans for Tax Reform, as of today, 440 companies (and counting) have announced new hiring, bonuses, wage hikes, 401(K) match increases, or, in the case of public utility companies, lowered rates since President Trump signed the bill into law just before Christmas. Apple, Disney, Home Depot, JPMorgan Chase, FedEx, Verizon, Starbucks, and PepsiCo. are just a few examples, and the list goes on.[10]

  • At least 4 million Americans are receiving special tax reform bonuses. This number does not even include those receiving pay increases or increased 401(K) contributions from their employer due to tax reform.[11]

  • America’s corporate tax rate will be lowered from the highest in the developed world to below the Organisation of Economic Co-operation and Development (OECD) average. The corporate tax rate will be cut from 35 percent to 21 percent, below the OECD average of 22.5 percent.[12]

  • The Council of Economic Advisers estimates that these tax cuts will grow the economy an additional 3 percent.[13]

  • Jamie Dimon, chairman, CEO, and President of JPMorgan Chase, the largest of the big four American banks, who also previously served on the board of directors of the Federal Reserve Bank of New York, went so far as to say the tax cut will lead to 4% growth. We haven’t seen 4% growth since 2000, and we haven’t seen 3% growth since 2005.[14]

  • According to the NFIB’s latest "Small Business Economic Trends Survey,” released in March 2018, this is the first time since 2006 that taxes received the fewest votes as the #1 business problem for small business. Now the biggest "problem" small businesses are facing is finding enough qualified workers to take the new jobs that have been created as the result of the renewed economic confidence and tax cuts.[15] 

  • Two states—Georgia and Idaho—have cut their own tax rates in response to the recent tax law.[16]  

The Overall Economic Situation: 

  • The labor market improved dramatically in 2017, adding 1.91 million jobs from the time President Trump took office until the end of December.[17]

  • Unemployment is the lowest it has been in 17 years.[18]

  • Indeed, sales and profits picked up for companies at the end of last year, and more say they’re paying their workers higher wages and salaries, according to a recent poll by the National Association for Business Economics.[19]

  • After decades of outsourcing jobs from America, companies are creating jobs here. Fiat Chrysler announced it is moving an auto factory to Michigan with 2,500 jobs. Toyota and Mazda announced that Alabama will be the site of a new $1.6 billion auto plant.[20]

  • The unemployment rates for African Americans and Hispanics have been at or near their lowest levels in more than four decades.[21]

  • A recent Quinnipiac poll finds that two-thirds of American voters now rate the economy as good or great, the highest number since the question was first asked 17 years ago.[22]

  • Consumer confidence is the highest it has been since November 2000, according to the Conference Board, which measures consumers’ assessment of current conditions and their outlook for the next six months. Also, the consumer confidence index rose to 130.8 in February, up from 124.3 in January.[23]

  • According to a University of Michigan study, U.S. consumer confidence rose in March 2018 to its highest level since 2004.[24]

References: 

[1] Americans for Tax Reform, https://www.atr.org/list

[2] Ben Casselman and Jim Tankersley, “Tax Overhaul Gains Public Support, Buoying Republicans,” New York Times, February 19, 2018, https://www.nytimes.com/2018/02/19/business/economy/tax-overhaul-survey.html?mtrref=www.pressconnects.com&gwh=ECFD9B52B6371B646D187D4CD35D67D1&gwt=pay

[3] Mia Taylor, Credit.com, “How the new tax code will impact your take-home pay as early as this month,” USA Today, February 14, 2018, https://www.usatoday.com/story/money/taxes/2018/02/14/tax-code-impact-paychecks-february/335902002/

[4] America First Policies’ National Voter Survey, February 16-20, 2018 (data available upon request). 

[7] The Tax Cuts and Jobs Act, Section 11021, https://www.congress.gov/115/bills/hr1/BILLS-115hr1enr.pdf

[8] The Tax Cuts and Jobs Act, Section 11022, https://www.congress.gov/115/bills/hr1/BILLS-115hr1enr.pdf

[9] The Tax Cuts and Jobs Act, Section 11081, https://www.congress.gov/115/bills/hr1/BILLS-115hr1enr.pdf and IRS, https://www.irs.gov/statistics/soi-tax-stats-historic-table-2. Click on "Total File, All States," which downloads an Excel spreadsheet onto your computer. Find the row for "healthcare individual responsibility payment" (i.e., folks who paid the Obamacare mandate). You'll see the first column there shows the total # of returns that paid it were about 6.7 million returns. It then breaks it down, throughout the row, by income group. When adding up the # of payments made by groups in columns that were $50K or less of income, it works out to show that about 80% of the returns who paid the mandate were indeed returns for individuals whose income was less than $50K.

[10] Americans for Tax Reform, https://www.atr.org/list

[11] Americans for Tax Reform, https://www.atr.org/list

[12] Kyle Pomerleau, “The United States’ Corporate Income Tax Rate is Now More in Line with Those Levied by Other Major Nations,” Tax Foundation, February 12, 2018, https://taxfoundation.org/us-corporate-income-tax-more-competitive/, and Kyle Pomerleau and Emily Potosky , “Corporate Income Tax Rates around the World, 2016,” Tax Foundation, August 18, 2016, https://taxfoundation.org/corporate-income-tax-rates-around-world-2016/

[13] “The Growth Effects of Corporate Tax Reform and Implications for Wages,” The White House of Council of Economic Advisers, October 2017, https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Corporate%20Tax%20Reform%20and%20Growth%20Final.pdf

[14] Tae Kim, “JP Morgan's Jamie Dimon says Trump's tax cut will lead to economic boom this year,” CNBC, January 24, 2018, https://www.cnbc.com/2018/01/24/jp-morgan-ceo-jamie-dimon-says-tax-cut-will-lead-to-higher-wages-inflation.html

[15] NFIB Research Foundation, Small Business Economic Trends Survey, February 2018 data, https://www.nfib.com/surveys/small-business-economic-trends/; Direct link to the report: https://www.nfib.com/assets/SBET-Feb-2018.pdf

[16] Jared Walczak, “Two States Cut Taxes Due to Federal Tax Reform,” Tax Foundation, March 19, 2018, https://taxfoundation.org/two-states-cut-taxes-due-federal-tax-reform/

[17] Steve Goldstein, “Trump Scoreboard shows 1.7 million new jobs created during presidency,” MarketWatch, December 8, 2017, https://www.marketwatch.com/story/trump-scoreboard-shows-17-million-new-jobs-created-during-presidency-2017-12-08, and data source from U.S. Department of Labor’s Bureau of Labor Statistics (BLS), https://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth

[18] Data source from BLS, https://data.bls.gov/timeseries/LNS14000000. This number was first hit in October 2017, but has remained constant to this point. Patrick Gillespie and Chris Isidore, “U.S. unemployment drops to lowest in 17 years,” CNN Money, November 3, 2017, http://money.cnn.com/2017/11/03/news/economy/october-jobs-report/index.html

[19] Stan Choe, “Sales are up for companies, and so are wages, survey says,” Associated Press, January 29, 2018, https://apnews.com/0c205f8be6394a4993d68684a2ba269e

[20] Norb Franz, “Fiat Chrysler investment ‘really what we needed,’” The Macomb Daily, January 15, 2018, http://www.macombdaily.com/business/20180115/fiat-chrysler-investment-really-what-we-needed. Matthew Rocco, “Fiat Chrysler, citing tax cuts, plans $2,000 employee bonuses and 2,500 new jobs,” Fox Business, January 11, 2018, http://www.foxbusiness.com/markets/2018/01/11/fiat-chrysler-citing-tax-cuts-plans-2000-employee-bonuses-and-2500-new-jobs.html. Bloomberg, “That Giant New Toyota-Mazda Car Plant in Alabama Could End Up Even Bigger Than Expected,” January 11, 2018, http://fortune.com/2018/01/11/toyota-mazda-alabama-car-plant/.

[21] Data source on African American unemployment from BLS, https://data.bls.gov/timeseries/LNS14000006. Heather Long, “Black unemployment falls to lowest level on record,” Washington Post, January 5, 2018, https://www.washingtonpost.com/news/wonk/wp/2018/01/05/black-unemployment-falls-to-lowest-level-on-record/?utm_term=.5f32840205f3. Data source on Hispanic unemployment from BLS, https://data.bls.gov/timeseries/LNS14000009. (CNN Money article at http://money.cnn.com/2017/12/08/news/economy/ivanka-trump-hispanic-unemployment-rate/index.html says 4.7%, but the data from BLS shows 4.8%.)

[22] Quinnipiac University Poll from January 10, 2018, https://poll.qu.edu/national/release-detail?ReleaseID=2511    

[23] Paul Wiseman, “U.S. consumer confidence rises to highest level since November 2000,” Associated Press, February 27, 2018, https://www.usatoday.com/story/money/economy/2018/02/27/u-s-consumer-confidence-rises-highest-level-since-november-2000/376689002/

[24] Ed Adamczyk, “U.S. consumer confidence highest in 14 years: study,” UPI, March 16, 2018, https://www.upi.com/US-consumer-confidence-highest-in-14-years-study/4811521220750/

X

Join Our Movement, Now.

Sign up for our newsletter and stay up-to-date with the latest America First news and information.

Thank you for signing up.