IE Business Daily Business news for the Inland Empire.
When Republicans in Congress passed the largest tax reform in the last 30 years, the opposition party held press conferences decrying the measure and telling the nation it was actually a big tax increase for the middle class. They referred to it as “Armageddon” and other outlandish descriptions of gloom and doom. Not a single Democrat in either the House of Representatives or the Senate voted for the measure.
Fortunately, it appears that the Democrats who were hoping to ride this “disastrous bill” to congressional majorities next November were wrong, if they weren’t outright lying to the American people.
Over 100 corporations have announced pay increases, bonuses and pension improvements for their employees, as a direct result of the tax reform. Starbucks, Disney and Fedex joined the crowd this week with similar announcements. Many more are likely on the way. Small businesses are also jumping on the band wagon, all crediting the tax reform bill.
As promised by the President and Congress, businesses with vast wealth parked overseas have started to announce the repatriation of those funds back into the United States. Apple recently announced it would bring $350 billion, with a “B,” into the country, creating 20,000 new jobs and paying an additional $38 billion dollars in taxes to the Federal Government thanks to the tax plan.
Without the Republican tax reform, those billions of dollars would stay parked, in foreign banks, never to benefit either our economy or government revenue.
But, the real benefit to working Americans hasn’t hit yet. The Internal Revenue Service released new withholding schedules on January 10th, reflecting the doubling of the standard deduction and lower tax rates. The new schedule is to be incorporated into paychecks no later than February 15th, but most employers are putting it into place immediately.
What does this mean? Working Americans will see their take home pay increase regardless of who their employer is. Whether they work in government or large or small businesses, nearly every working American will receive what basically amounts to a pay increase of approximately $2,000 a year. That is more money for whatever they want to do with it, whether paying off debt, investing, putting it towards their kid’s college savings, or spending it.
More Americans will keep more of their own money, earn more, and grow the economy.
That’s not quite what Democrats across the country said would happen. Which begs the question: How do they expect to run against a tax reform bill that lets their constituents keep their own money? How do you run a legitimate campaign on claiming that the middle class is being harmed, when every working family will see, in their own paychecks, that they have more money, not less.
It will be interesting to watch as Democrats, who voted against the increased wealth of their own voters attempt to tell them that their improved financial situation isn’t a good thing. That should go well.
