Will corporate tax cut benefit middle class or the rich?
The greatest change to the U.S. tax code in over 30 years, which I strongly supported, was signed into law last month. Yet its impact is already being felt – companies are hiring, employment is up, take home pay for working families has increased, junior employees are receiving end-of-year bonuses, the stock market soars and the list goes on.
Individuals, families and employers all get a tax break. According to the Brookings Institute, 81 percent of taxpayers will see a tax cut, averaging $2,000 annually. (The few who will not pay less in taxes tend to be wealthier individuals in high tax states like California and New York.)
On top of tax cuts, all workers and employers will benefit from a climate of increased job creation and corporate investment. Corporate investment and entrepreneurial ventures fuel our economy. This is how jobs are created and businesses grow. The American Enterprise Institute found that cutting corporate tax rates nets more for individual workers than cutting individual tax rates.
Despite these facts, naysayers remain starkly opposed to this historic legislation and claim only the wealthy benefit. "Crumbs" is what Nancy Pelosi called the bonuses and wage increases more than 2.6 million Americans have received in just the four weeks since the Tax Cuts and Jobs Act was signed into law.
Mrs. Pelosi is simply out of touch. For families who are living paycheck-to-paycheck, an increase in take-home-pay and a $1,000 bonus to start out the new year is the difference between fixing the car, getting dental work for the kids, taking a vacation, or just doing without.
Companies big and small, including Walmart – the largest private-sector employer in the United States – have also announced plans because of the tax cut to expand employee benefits, like 401k matching and maternity leave. Some businesses have reversed previous plans to leave the United States. Even utility companies are passing on tax savings to consumers. These benefits are for everybody, not just "the rich."
According to a National Association of Manufacturers survey of their member companies, nearly 54% of respondents said they would hire more people because of the tax cut.
In Colorado alone, various companies are paying the tax cuts forward. The CEO of Canary LLC, Dan Eberhart, told Fox Business Network, "There are two components. One is ordering more capital equipment, which is what the expensing provision of the new tax reform bill allows us to do. And the second leg of that is hiring more people which we are furiously working on right now."
The Bank of Colorado and the National Bank Holdings Corp are handing out bonuses to all employees. President of Bank of Colorado, Shawn Osthoff, said in a letter to me, "We feel strongly that the message should be loud and clear that this tax cut will benefit all Americans." Bank of Colorado has 641 associates in Colorado and New Mexico.
While the largest tax cuts in the bill are permanent, Congress will next seek to go even further by making all tax cuts across the board permanent. This will spur even more American prosperity for businesses, families and individuals alike.
Doug Lamborn represents Colorado's Fifth Congressional District in the United States Congress.