Let us begin with the basic premise in which most can agree: Tax cuts provide families with more of their earned income to spend or save and provide businesses with more of their earned income to invest, spend or employ. Those outcomes generate economic growth, create wealth, and enhance job opportunities.
The Kennedy-Johnson tax cut of 1964, the Reagan tax cuts of 1981 and 1986, and the Bush tax cut of 2001 all mirrored the current tax cut plan through a combination of lowering individual, corporate and/or investment income tax rates. The previous major tax cuts all received significant bipartisan support. The current Tax Cuts and Jobs Act of 2017 has thus far received exclusively Republican congressional support.
The tax cut bill lowers the corporate rate significantly, finally providing a competitive global market for U.S. firms to compete, as well as a sufficient rate to allow for enhanced business investment and job growth. This lower U.S. rate will also drive additional foreign investments into the U.S. to take advantage of a more business-friendly tax rate and a more favorable regulatory atmosphere under the current administration. Entrepreneurs and small businesses also receive reductions in the flow through rate, which is being reduced by significant margins from current levels. Middle-income earners are also favorably impacted in the bill through a lower basic rate, an increase in the child tax credit, and significant increase in the standard deduction.
Let us also put to rest the false narrative that the current tax plan only serves “the rich.” The latest summary of federal income tax data from 2014 (from the Tax Foundation) found that the top 1 percent of income earners pay 40 percent of all income taxes paid in the U.S., the top 5 percent pay 60 percent of all income taxes paid, and the top 10 percent pay 70 percent of all income taxes paid. Yes, there are those in far more in need than top income earners, but the socialistic class-warfare argument clearly collapses when facts are honestly reviewed.
Most importantly, the tax cuts will provide a bolt of energy and capital into the economy providing a surge in economic growth and job creation. Certainly, we as a nation are better off with more money in the hands of families, entrepreneurs and U.S. companies than in the morass of the DC swamp? Recent economic data demonstrates a roaring stock market leading to improved 401Ks, higher GDP growth, enhanced consumer confidence, stronger retail spending, and a lower unemployment rate. The Tax Cuts and Jobs Act of 2017 will provide an additional boost to families and businesses, further solidifying American prosperity.
Sound policies which boost prosperity should not be usurped by animus and discredited class-warfare propaganda. Let us find one major issue in which we can all agree — put more money back into the hands of families, entrepreneurs and businesses and keep the American dream alive.