Jan 21 2020
Higher Pay, More Jobs, and a Better Tax Code
The Tax Cuts and Jobs Act became the law of the land two years ago. It represents the largest overhaul of the U.S. tax system since the Reagan presidency - a longtime goal for Republicans.
This tax reform came with a lot of promises, like higher economic growth, a simpler code, lower rates for middle-class families, and restored American competitiveness on the global stage. Two years in, every one of those promises has been kept. The United States’ economy is reenergized and on stronger footing thanks in large part to this landmark legislation.
A Record of Success
The most obvious benefit of the tax cuts is increased take-home pay. A family of four making the median annual income in our country had their taxes reduced by $2,058. A single parent with one child and an annual income of $41,000 had their bill reduced by $1,304. All in all, 90 percent of workers are keeping a larger share of their money today than they were before December 2017.
During the past two years, wages have surged particularly for low-income earners and those without high school diplomas. According to new data from the Council of Economic Advisors, earnings have grown faster among rank-and-file workers than managers. Additionally, wealth has grown at a higher rate for low-income Americans than the top one percent.
This good news directly benefits Mississippians. At a House Small Business Committee hearing, a grocer from Woodville reported that the law has allowed him to upgrade and replace equipment and provide employees with raises. Shipbuilders on the Gulf Coast saw bonuses and larger contributions to their pensions. More than 100 areas in Mississippi are now “opportunity zones,” attracting private investment from outside sources to communities in need. An opportunity zone in Claiborne County alone could attract up to 1,000 construction jobs.
Tax reform has also helped our country become a net exporter of petroleum. The law opened up 2,000 acres in Alaska for responsible oil and gas development. More American energy means more jobs, a stronger economy, and less reliance on foreign and potentially hostile sources of oil and gas.
Under our nation’s old tax code, our businesses were at an international disadvantage. America’s corporate tax rate was 35 percent, higher than any other in the developed world. The reduction to a 21 percent rate was followed by an increase in U.S. business investment, which has helped fuel our economic resurgence.
The Tax Cuts and Jobs Act implemented a lot of new, good ideas. It also repealed burdensome rules and regulations, including the individual mandate in Obamacare. Under that failed provision, people who could not afford or did not choose to purchase Obamacare’s increasingly expensive plans were punished again with a new tax. This burden hurt low-income Americans more than any other group, and the repeal is a much-needed relief.
Pro-Growth Policies Work
The Tax Cuts and Jobs Act’s success shows that pro-growth polices work. Unlike proposals to give more power to Washington, tax cuts restore decision making back to individuals. In doing so, they empower all Americans and help people and families across this country achieve their economic potential.
Today the American economy has powerful momentum, and there is every reason to be optimistic about the future.