Toasting the Tax Cut

 

Edwin_Feulner_minipicWe’re used to hearing politicians oversell their accomplishments. But President Trump is absolutely right to brag about the Tax Cuts and Jobs Act.

“At last, our country finally has a tax system that is pro-job, pro-worker, pro-family, and pro-American,” he said at an event marking the six-month anniversary of the TCJA.

It seemed particularly apt to hear the president tout the legislation so close to the Fourth of July holiday. Independence Day is all about celebrating the freedom of the individual citizen to chart his own course, as unencumbered by government as possible. In that sense, the TCJA is a very worthy piece of legislation to toast so close to July 4.

The whole point of the law, let’s remember, is lightening the burden of government. As President Trump noted, the TCJA is all about “new jobs, bigger paychecks, and keeping more of your hard-earned money where it belongs: in your pocket or wherever else you want to spend it.”

At the time the law passed, of course, hopes were high. And the benefits didn’t take long to materialize. Almost immediately, numerous employers — including Boeing, AT&T, FedEx, CVS, and others — began offering bonuses to their employees. Or they announced that they were creating new jobs. Or both.

Fast-forward to June, and the economic news was glowing. Even The New York Times – no fan of President Trump, to put it mildly – ran an article headlined, “We Ran Out of Words to Describe How Good the Jobs Numbers Are.” Unemployment? Down. Wages? Up.

“The typical family of four earning $75,000 will see an income tax cut of more than $2,000, and in some cases much more, slashing their tax bill in half,” President Trump said at the six-month event. “We cut taxes for businesses of all sizes to make this the best place on earth to start a business, to invest. We have billions and billions of additional revenue coming in.”

What else is coming in? Jobs. The overall unemployment rate is the lowest it’s been in more than 40 years, and it’s now historically low for blacks and Hispanics.

It’s improving for women as well: ““Unemployment for women, if you listened to my speech two weeks ago, you would have heard me say it’s the lowest in 21 years,” Trump said. “Now I’m saying it’s the lowest in 65 years and soon will be the lowest in history.”

That’s not to say the TCJA deserves all the credit. As Trump pointed out, it also helps that we’re addressing what is sometimes called “the hidden tax”: regulation. “I think the cutting of regulations maybe had just as big an impact” as the tax cut, he said. Considering the way in which over-regulation imposes numerous costs on the economy, I think he has a point.

I was also glad to hear Trump highlight other features of the TCJA, such as allowing “expensing” – a fancy word for letting companies deduct, as he put it, “every single penny of investment in new equipment” – and reducing the burden of the death tax. These changes are playing a big role in the success of the legislation.

It was gratifying to hear the president note the help of The Heritage Foundation as he spoke of all the economic benefits. He included Heritage President Kay Coles James in a list of other leaders who have been instrumental, including Juanita Duggan, the head of the National Federation of Independent Businesses, or NFIB.

Mind you, there’s still work to be done. There’s much we can do to simplify our byzantine tax code, and make it flatter and fairer to all Americans. And we must do something to finally cure Washington’s out-of-control spending addiction.

But the TCJA is off to a great start.

Ed Feulner
www.heritage.org
Ed Feulner Column at Kingscalendar

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Author: Ed Feulner

Ed Feulner is founder of The Heritage Foundation (www.heritage.org), the nation’s most broadly supported public policy research institute, with hundreds of thousands of individual, foundation and corporate donors. The Heritage Foundation, founded in February 1973, has a staff of 275 and an annual expense budget of $82.4 million. Its mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense

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