Nearly two years ago, Republicans passed the Tax Cuts and Jobs Act. As President Trump signed this bill into law, Democrats claimed that it would only benefit “the rich” and corporations. Then-House Minority Leader Nancy Pelosi declared that any benefits to the middle class would be “crumbs.”
So, what actually happened?
Immediately following passage of the GOP tax cuts, businesses large and small responded by giving pay raises, 401(k) increases, bonuses, and other employee benefits.
For instance, AT&T announced a $1,000 bonus for 200,000 U.S. employees, while Pfizer announced $100 million in bonuses to nonexecutive employees.
Visa doubled its 401(k) employee contribution match to 10% of employee pay, while Boeing pledged to spend $300 million equally divided among charitable donations, workforce development, and infrastructure improvement.
Many small businesses did the same. Five Senses Spa, Salon, and Barbershop, based in Peoria, Illinois, gave $500 bonuses to its 20 employees and added employee benefits. Firebird Bronze, an Oregon-based manufacturer, was able to afford giving its nine employees health insurance for the first time. Anfinson Farm Store, a family-owned business in Cushing, Iowa, (population 223) gave its employees $1,000 bonuses and raised wages by 5%.
The Left dismissed these benefits as temporary and inconsequential. That has proven to be false.
A family of four earning the median annual income of $73,000 saw a federal income tax cut of $2,058, reducing their tax bill nearly 60%. This is not a one-time reduction and will recur annually.
More than 93% of taxpayers are now taking the standard deduction, leading to drastic tax simplification.
Twenty-two million families have benefited from the child tax credit doubling from $1,000 to $2,000, while 4.5 million people no longer have to pay the alternative minimum tax.
In addition to this tax reduction, everyone is benefiting from a thriving economy.
Since Trump took office, 7 million jobs have been created, and 24 states have seen record low levels of unemployment.
Annual hourly earnings have grown by 3% for the past 16 months, and real median household income has grown by $5,525 since the start of the Trump presidency, according to findings by Sentier Research. The ratio of unemployed persons to job openings is at a record low of 0.8. The unemployment rate hit a 50-year low last month and has been at or below 4% for 20 consecutive months.
The stock market is also strong. At the time of the 2016 election, the S&P 500 sat at around 2,100. Today, it has increased to roughly 3,100, an increase of almost 50%.
These gains directly benefit the 100 million people who have a 401(k) through work, the 42.6 million households that have an individual retirement account, and the nearly $4 trillion in public pension funds, half of which is being invested in stocks.
Stronger economic growth has already “paid for” 80% of the costs of the tax cuts, according to nonpartisan Congressional Budget Office estimates before and after the law was enacted.
Despite the strong economy, Democrats are pushing policies that would undo this growth and impose new taxes on families and businesses.
In addition to repealing the Tax Cuts and Jobs Act, the Left wants to impose a government monopoly “Medicare for all” healthcare plan that would outlaw your individual health insurance plan and require approximately $32 trillion in new taxes to finance.
It will inevitably require tax hikes on the middle class — a fact that Joe Biden and Bernie Sanders frequently point out. In fact, draconian tax hikes on “the rich” would pay for no more than 30% of the cost of these plans, according to existing estimates. The rest will come from us.
In addition, the tax hikes would return us to the Obama years of slow job and income growth. Elizabeth Warren is proposing numerous tax increases: taxes on stock trades, a global 35% corporate tax, a tax on wealth, and a tax on workers.
In contrast, Trump and Republicans want to build on the success of the Tax Cuts and Jobs Act.
Ahead of the 2020 election, Trump plans to release a second tax cut that will offer further middle-class and small-business tax reductions that ensure the economy remains strong.
Today, the successes of the Trump GOP tax cuts are clear: higher wages, more jobs, and stronger growth. Democrats promise that if they win power in Washington, they would erase these gains with an agenda of higher taxes and slower economic growth.
Grover Norquist (@GroverNorquist) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is the president of Americans for Tax Reform.
