Yesterday, the House Ways and Means Committee kicked off a series of hearings on how the Tax Cuts and Jobs Act has helped grow the economy, create jobs and put more money in taxpayers’ pockets. Sen. Marco Rubio (R-Fla.) should consider attending and taking notes, given his recent not-so-flattering comments about the landmark tax reform legislation signed by President Donald Trump last December.
In an interview with The Economist, Rubio stated there was “no evidence” the TCJA helped America’s workers and that “there is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers.”
The senator might want to rethink his comments after taking a look at the latest jobs numbers — the unemployment rate dropped to an 18-year low of 3.9 percent with nonfarm payrolls rising by 164,000. And if he needs more evidence of the positive economic effects of the TCJA, he need only turn to the nonpartisan Congressional Budget Office’s projections that over the 2018-2028 period, the legislation will lift the level of real Gross Domestic Product by an average of 0.7 percent and nonfarm payroll employment by an average of 0.9 million jobs.
If Rubio is still not convinced, then we would urge him to read Rep. Erik Paulsen’s (R-Minn.) excellent Wall Street Journal op-ed. Paulsen, who also serves as the chairman of the Joint Economic Committee, writes, “For proof that the gains of tax reform are already flowing to American workers, Sen. Rubio need only ask the nonpartisan analysts who advise Congress on economic matters. The Bureau of Economic Analysis recently reported that real disposable income—workers’ inflation-adjusted earnings, after taxes—rose 3.4% in the first quarter of this year. The bureau specifically credited tax reform for higher wages as well as lower taxes.” Paulsen also notes that more than 530 companies announced bonuses, more benefits and pay raises with an estimated four million workers receiving those bonuses already.
So let us review what tax reform has achieved so far:
• More money for hard-working Americans? Check.
• Reinvesting in workers? Check.
• Job growth? Check.
• Boosting our nation’s economy? Check.
Now if that’s not helping America’s workers then we are uncertain as to how Rubio would define “helping.” Even his home state of Florida is already experiencing the positive effects with the Orlando-based Darden restaurant group announcing that because of tax reform, it would invest $20 million into its workforce. And according to a Tax Foundation analysis of the TCJA, 19,655 new jobs will be created in the state with a $562 gain in after tax income for middle class families.
On a business and individual side, the TCJA was designed to reduce an overly burdensome and complex tax code that was driving American businesses overseas as they found themselves at a disadvantage in the global marketplace. By lowering the exorbitantly high corporate tax rate and moving to a territorial tax system, the United States has become the welcoming tax environment that so many businesses were previously seeking. As a result, workers and the economy are now reaping the benefits.
ndividually, the legislation simplified the tax code and cut the individual rates across the board so Americans can keep more of their hard-earned money. The standard deduction was nearly doubled from $6,500 and $13,000 for individuals and married couples, respectively, to $12,000 and $24,000. The child tax credit was expanded from $1,000 to $2,000 with the first $1,400 refundable — a change Rubio insisted upon in order to secure his vote. With these and other significant changes, taxpayers will be keeping more of their earnings moving forward.
The TCJA is accomplishing exactly what it was intended to do which is why we find Rubio’s remarks so disappointing and puzzling. Perhaps he needs a tax reform refresher because the TCJA checks off all the right economic boxes.
David Williams is president of the Taxpayers Protection Alliance.
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