After almost a decade of stunted growth, depressed wages, and general pessimism, America’s economic confidence is growing. And soon worker’s paychecks will be, too.
Enacted less than a month ago, families are already starting to see the early benefits of the Tax Cuts and Jobs Act.
The good news for American workers hasn’t stopped rolling in since tax reform became the law of the land right before Christmas. A growing list of more than 160 American companies from Boeing to Wal-Mart, from Waste Management to AT&T, have already announced bonuses, wage increases, and more than $1.6 billion in new investments in the United States. To date, more than 2.6 million employees are due extra pay and increased benefits already. These companies all credited tax reform as the reason why this is possible.
That is because one part of tax reform was lowering America’s exceptionally high corporate tax rate. We knew that by reducing this burden businesses would be better able to invest in our economy and their workers. Some in the media called this idea fantasy. A Democratic leader in Congress predicted it would lead to Armageddon. But to an American family receiving a $1,000 bonus or a line worker benefiting from a boosted minimum wage, it’s real relief.
Lower energy costs are another benefit of tax reform that American families are already seeing. Major utility companies across the country have announced they are passing on the benefits of tax cuts onto their consumers. Baltimore Gas & Electric, for example, said that its average customer could see an estimated $4.27 reduction in their monthly natural gas and electric bill. For folks living paycheck-to-paycheck or those under the poverty line, that’s a big deal.
Lowering the rate on businesses—which before was one of the highest in the industrialized world—also keeps American businesses here at home. And sure enough, we’ve already seen evidence of tax reform stemming the tide of companies fleeing America. In October, the American insurance company Assurant announced it would move its headquarters to Bermuda, but this week, the company reversed course and announced it would stay in the U.S.—because of tax reform.
This is all great news for the American economy. But the best is yet to come.
At the heart of this law is a lower tax burden for middle-income American families, and people will start to see that very soon. This week, the Treasury Department announced that it has adjusted the amount that the IRS takes out of your paycheck to account for the new law. It estimates that 90 percent of wage earners will experience an increase in their take-home pay, starting as soon as this February. That’s huge. We know that the typical family of four earning the median family income of $73,000 will receive a tax cut $2,059 this year. That’s more money to pay down the mortgage, save for the rainy-day fund, or go on that family vacation this summer. It’s a chance to finally get ahead.
With all this good news in just a matter of weeks, it’s no wonder that economic optimism is rising in America. And it’s only going to get better from here. Tax reform is helping to improve people’s lives, and that’s what this is about.